Digital Transactions Authoritative, insightful and timely information for payments professionals
Jon Purther, Director of Research at Payments Canada
The payment landscape is rapidly changing, and new technologies like generative artificial intelligence (GenAI), social commerce and pay-by-bank are poised to dramatically transform the way we shop and pay.
A recent study from Payments Canada shows that Canadians are hesitant to embrace these innovations, suggesting they are waiting for more familiarity before forming an opinion. One reason for this hesitation is that while Canadians seek convenience in how they pay, they prioritize security and privacy above all.
Generative artificial intelligence (GenAI)
GenAI offers a wide range of applications in areas like payment processing and service delivery. It can also help create personalized discounts or pricing, offer virtual shopping assistants such as chatbots and provide tailored product recommendations. However, Canadians have mixed views on the use of GenAI.
Forty-three per cent of Canadians are interested in using these technologies, 44 per cent are not and 13 per cent are unsure. Younger Canadians aged 18-34 show more interest (56 per cent) compared to those aged 35-54 (48 per cent) and those over 55 (31 per cent).
When it comes to enhancing the online shopping experience, Canadians’ opinions are divided: 28 per cent find it appealing, 34 per cent find it unappealing and 38 per cent are neutral. Fraud detection and prevention is considered the most valuable use of GenAI, with 45 per cent of Canadians identifying it as the top benefit.
Social commerce
More than one in ten Canadians have used social media commerce, though security concerns remain a significant deterrent. Social commerce allows consumers to buy and sell products directly through social media platforms without leaving the app or platform.
Among those who find social commerce appealing, the main reasons include convenience and ease (40 per cent), usefulness and interest in (six per cent) and a preference for this method of shopping (five per cent).
For those who do not find social commerce appealing, the key concerns are security (48 per cent), lack of interest or perceived usefulness (14 per cent), not using or liking social media (10 per cent) and avoiding impulsive purchases (five per cent).
Pay-by-bank
Pay-by-bank is a method that allows consumers to make payments directly from their bank account to a merchant, bypassing traditional payment options like credit and debit cards. When using pay-by-bank, also called account-to-account (A2A), consumers choose it at checkout, whether on an e-commerce site, app, or point-of-sale terminal. They are then redirected to their online banking platform or app to approve the transaction.
Overall, 29 per cent of Canadians find pay-by-bank appealing, 33 per cent do not find it appealing and 38 per cent are neutral. Newcomers to Canada (53 per cent) and gig workers (47 per cent) are significantly more likely to use pay-by-bank.
The key attraction of pay-by-bank is security, with 32 per cent of Canadians indicating it offers greater protection. This is because when making an online purchase, consumers do not have to enter their credit or debit card information directly on the merchant’s site. Instead, they are redirected to their online/mobile banking platform to confirm the payment transaction. The payment is made via an A2A transfer directly from the consumer’s bank account.
Discover the future of payments
As the payment landscape continues to evolve, one thing remains clear: Canadians prioritize security when evaluating new payment technologies. While there is undeniable interest in innovations like GenAI, social commerce and pay-by-bank, many Canadians remain cautious.
To learn more about the payment innovations shaping the payment landscape and how security is playing a crucial role in this evolution, register for The SUMMIT, Payment’s Canada’s annual conference, using promo code SUMM25PCVIP to save $100.
ABOUT THE AUTHOR: Jon’s career encompasses more than 25 years of senior management experience in forensic research and strategic marketing management, including domestic and international assignments. With Payments Canada, Jon is spearheading teams involved in strategic, product and market research.
