Canada possesses a rich cultural diversity, which was significantly influenced by the values and traditions of the French. In recent years, the country has become a haven for educated immigrants from war-torn countries who seek to access better living conditions. This phenomenon has increased the cultural and ethnic diversity of the country, which led to a society with different economic needs that seeks diverse and flexible methods for payments and the execution of transactions.
The gradual change in the populace’s preference and the influence of having a neighbor (US) with a population that is 10 times larger has significantly affected the methods of payment and how transactions are carried out across the country. Businesses provide various payment options suitable to all types of clients to guarantee customers’ satisfaction and preserve patronage.
Methods of Payment
There are several methods of payment used in Canada. We are going to highlight the most popular methods of payment in the country.
The cash option is still a popular method of execution of transactions in Canada. A large percentage of the Canadian population still prefers to use the traditional paper note to carry out business transactions. In the previous year alone, an estimated value of $100 billion worth of cash transaction had occurred within the country. Small businesses and low-income families prefer to use cash in exchange for goods and services.
Since the beginning of this century, the use of cash for transactions has gradually declined. Transportation is one sector that has seen a significant drop in the use of cash for transaction purposes. The advent of bus bundles and taxi services like Uber have drastically propelled users to various forms of electronic options to complete transactions.
Both debit card and credit card options account for an estimated value of about $1 trillion worth of transactions. Contactless debit cards are quite popular in the country because of ease of use. The ever-growing e-commerce terrain and popular payment apps, such as PayPal, have increased the use of debit cards.
Reward systems, incentives, and other benefit programs have made the credit card option to occupy the position of a more significant percentage of the value of the transaction in Canada. They are quite popular in online and application-based transactions. Also, the fact that you get to perform transactions on credit makes this option convenient.
Electronic Funds Transaction Option
Electronic funds transaction or simple EFT is the most used transaction option in terms of value in Canada. It accounts for about $5 trillion. The more significant percentage of EFT mostly involves routine utility bill transactions, which occur regularly. Others include digital data exchange and direct deposits. The Canadian government and many businesses use EFT to perform essential routine transactions such as salary and remuneration payments. The ease of use of this option makes it a popular option for many cooperations.
Many businesses and individual clients still prefer to use cheque as a payment method. The use of EFT and credit cards have, over the years, reduced the value of the transaction that occurs with this method. However, it still boasts a transaction value of over $4 trillion.
Every year, the value of transactions done with the different payment options continues to change. As technology becomes more advanced and secured, the digital and electronic payment options continue to rise until they dominate the global market.