COLUMBUS, Ga.—A new study of Canadian consumers shows that despite debit’s surge in recent years, credit cards remain the preferred payment choice.
The TSYS 2015 Canadian Consumer Payment Choice Study also indicates that credit will continue to hold onto its place at the top of the payments chain, but that debit has a strong online competitor—PayPal—which is now beating debit for online shopping.
“From our survey, we found that when given a choice more people prefer to pay using their credit cards than any other payment form,” TSYS said. “The second-most-preferred option was debit cards. Consumers’ preferences for using credit cards to shop online, combined with an overall increase in e-commerce, makes us believe that the increase in credit use will continue. We have also seen in other research that many consumers believe using credit online is safer than using debit, which further supports this trend prediction.”
Cash was the third-most-preferred payment option, the same ranking in last year’s study of the Canadian market by TSYS.
“Although we did see a decrease in respondents who preferred to use cash when making payments. That is consistent with other research that reflects that cash will continue a downward trend. However, cash will probably always have a use, at some level, in consumer payments,” TSYS said.
Debit ranked as the second-most-preferred payment type across almost all merchant locations. However debit did not rank second in online shopping, where PayPal beat out debit as the second-most-preferred type of payment, behind credit.
The online survey of more than 1,200 respondents shows that debit offers and rewards are still highly desired and the biggest driver of cardholder behavior. When asked what features are most-valued and what would change cardholder behavior, survey participants consistently responded that rewards and offers from their card issuers would.
Cardholders indicated they are open and willing to receive communications from their financial institution. Forty-seven percent of respondents said that they are open to receiving coupons and special offers based on the information their financial institution collected about their purchase behavior. When respondents were asked about the delivery preference for communication from their financial institution, they typically indicated they preferred e-mail and a frequency of once a month.
While mobile payments continue to increase, their share of overall payments transactions remains low, TSYS said. Of those that are interested in conducting transactions with their mobile phone, they are most interested in “tapping” at POS with NFC.
As other reports have indicated, the study found that consumers are very interested in using their mobile phones to manage and protect their accounts by using emerging “card control” apps that, among other features, allow people to turn their card on and off.
The study found that frequent users of FI mobile apps were typically between the ages of 25-44 and had an income of $50,000-$100,000.
“We believe that as mobile app offerings continue to increase—and the real estate on mobile phone screens remains limited—it will be increasingly important for the app to provide desired functionality and regular accessibility to retain its spot on the mobile device home screen,” TSYS said.