For the first time ever, Interac recorded more than one billion Interac® Debit on mobile transactions in a 12-month period — a clear indication that a significant number of Canadians now prefer using a mobile device for everyday payment transactions.
These transactions pass through the Interac Token Service Provider (TSP), which is a tokenization platform for digital payments. It allows consumers to complete a transaction without exposing their financial information while using a mobile device at a contactless point-of-sale reader, or virtually, through a mobile app. This not only significantly reduces the risk of fraud, it makes paying simple and convenient for consumers.
Interac data shows an increase of 53 per cent year-over-year in the number of Interac Debit contactless payments made at a point of sale in Canada using a mobile device, such as a smartphone or wearable, between August 2022 and July 2023 — reaching a total of just over one billion transactions during those 12 months.
Interac Debit payments by mobile device are steadily rising
“The milestone shows that consumers are growing more comfortable with using mobile technology for their day-to-day payment transactions, said William Keliehor, Chief Commercial Officer at Interac. They’re gradually switching from physical cards to mobile devices for their Interac Debit contactless payments transactions, and choosing to pay by Interac Debit when shopping online.”
“Canadians are embracing technologies that make their lives faster, more seamless and more convenient,” he said. “Our Interac Debit data is showing mobile payments reaching a critical mass point, where a third of contactless transactions are now completed with a mobile device.”
The data show an increase in consumers using their mobile device to complete an in-person Interac Debit contactless payment transaction, as opposed to a physical card. Mobile payments’ share of these transactions rose from 18 per cent fiscal year-to-date in 2022 to 24 per cent fiscal year-to-date as of July 2023. And in the month of July, 25 per cent of Interac Debit contactless payments were by mobile device.
Interac Debit In-App transactions also gathered pace, growing 17.5 per cent year-over-year, fiscal year-to-date, surpassing 8.6 million transactions.
Keliehor said the pandemic accelerated an existing trend toward contactless digital payments (as Interac data has been showing since early this decade). During the same time frame, many consumers saw an increase in the spending limits for tap-to-pay transactions (depending on their financial institution), which has also helped drive the trend toward mobile wallet payments.
However, those factors are both secondary to the major driver of the increase in Interac TSP transactions, Keliehor said, namely debit-first and mobile-first payments. “More and more Canadians are choosing to pay using a mobile device like a smartphone or wearable device, and we’re seeing this reflected in our transaction data as well as survey findings,” he said.
Gen Z are influencing elder generations to make mobile payments
Not surprisingly, Gen Zers are the Canadians most likely to leave their physical wallets at home and pay with a mobile device. According to new research from Interac, nearly eight in 10 (78 per cent) of Gen Zs polled complete in-person transactions using their smartphones.
But the research also showed that Generation Xers and Baby Boomers are shedding their reticence around trusting mobile payments, and embracing them at last. Among Gen Xers, 42 per cent now use smartphones to pay — and they’ve been nudged into doing so by younger people. Forty-one per cent of Gen Xers say they take a “you go first” approach, preferring to watch other people in their circle use mobile payment methods before they dive in themselves. And Gen Zers are leading the way for their elders: Half of them (52 per cent) say they’ve shown older family members how to pay using contactless mobile payments.
Keliehor also noted that as Canadians adopt faster and more convenient technologies, they’re taking it for granted that businesses will offer the full spectrum of payment options, including mobile contactless and in-app payments with Interac Debit. Across generations, mobile payments by debit are becoming an expected part of daily life: The survey found that 71 per cent of Canadians believe there should always be the option to choose to pay by debit when paying digitally, online or in person.
Interac promises more payments innovation to come
Keliehor said there’s no looking back: As consumers embrace more convenient payment methods, they will continue to expect them to be offered everywhere. “We’ve been referring to this evolution as the ‘big shift,’ ” he said.
“We’re working hard to make sure businesses of all sizes can meet these expectations, and we’ll have more innovations to talk about in the months and years ahead.”
He noted that Interac listens to market needs and continually develops innovative products and services for payments to meet the needs of the 24-hour digital economy, and consumers’ ever-growing appetite for choice.
Interac is helping businesses across Canada navigate the ‘big shift’ in payments