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How Canadians Pay: 20 Years of Credit-Card Evolution

Day 4 — How Canadians Pay: 20 Years of Credit-Card Evolution

Credit cards are quietly reshaping how Canadians spend, borrow, and build loyalty.

Over the last two decades, five major trends have defined the country’s payment landscape:

1. Contactless & Mobile Payments
2. Rewards & Co-branded Cards
3. Market Share Concentration
4. Fintech Disruption
5. Regulation & Policy Shifts

Here’s what’s changed — and why it matters.

Contactless & Digital Wallets

Remember when you had to insert your chip and wait?

  • In 2015, only ~40% of Canadians used contactless payments regularly.
  • By 2024, that number is over 90%.

Nearly every in-store transaction — and two-thirds of online purchases — now runs through cards. [1]

Mobile wallets such as Apple Pay and Google Pay accelerated this shift, merging convenience with data-rich, loyalty-driven ecosystems.

Insight: Payment friction is gone. The new competition isn’t about acceptance — it’s about data, personalization, and trust.

Rewards & Co-Branded Ecosystems

Rewards programs aren’t perks anymore — they’re profit engines.

Banks and brands have built powerful loyalty ecosystems:

  • Travel cards (Aeroplan, WestJet)

  • Retail co-brands (Costco, Canadian Tire, PC Financial)

These programs generate billions in annual revenue for issuers and partners.

Surveys show that rewards and no annual fee remain top decision factors for consumers. [2][3]

Insight: When brands and banks come together, loyalty becomes a currency — powered by the right data.

Market Share & Fintech Disruption

The rails are more concentrated than ever:

  • Visa — 36.5%

  • Mastercard — 23.9%

  • Interac (mostly debit) — 37.6% [4]

Meanwhile, fintechs are reshaping the space through:

  • Digital-first, low-fee credit cards

  • Instant approvals and virtual cards

  • Buy Now, Pay Later (BNPL) alternatives

Insight: Fintechs aren’t replacing cards — they’re redefining who controls the experience.

Policy, Credit Risk & What’s Next

Canada is modernizing its payments ecosystem on multiple fronts.

  • The Bank of Canada is introducing supervision for payment service providers (PSPs) under the Retail Payment Activities Act, aimed at improving consumer protection, operational resilience, and fair competition. [5]
  • In parallel, Payments Canada is advancing the Real-Time Rail (RTR) initiative — a new infrastructure expected to improve speed, data transparency, and inclusion across the financial system. [6]

At the same time, household debt is rising:

  • Debt-to-income ratio: ~180% (Q2 2024)

  • Credit card balances: up nearly 10% year-over-year as higher interest rates increase revolving debt [7]

  • Delinquency rates: trending upward but still below pre-pandemic levels

Insight: In a high-debt, high-tech economy, regulation and innovation must evolve together — or risk leaving both consumers and businesses exposed.

What Canadians Spend the Most On

According to Statistics Canada, the biggest household expenses are:

  • Shelter: 32.1% of total spending (~$24,671 per household)

  • Food: 15.7% (~$12,046 per household, with ~$3,351 on restaurants)

  • Transportation: 15.8% (~$12,090 per household)

  • Recreation & Travel: Strong rebound post-pandemic, led by dining, entertainment, and air travel

  • Discretionary Spending: First to be reduced when budgets tighten — typically restaurants and travel [8][9]

Insight: Rising food and housing costs mean consumers are optimizing card rewards — shifting spending toward essentials and cards that deliver tangible value.

Canada’s credit landscape tells a larger story:

  • Technology removes friction

  • Rewards create loyalty

  • Fintechs shift power

  • Regulation struggles to keep up

Which of these forces do you think will define the next decade of credit in Canada?

#30Days30BusinessCases #PolicyMeetsTechnology #CreditTrends #Fintech #PaymentsCanada

References

[1] Bank of Canada — Methods-of-Payment Report (2023)
https://www.bankofcanada.ca/wp-content/uploads/2024/07/sdp2024-8.pdf

[2] NerdWallet Canada — 2024 Consumer Credit Card Report
https://www.nerdwallet.com/ca/p/credit-cards/2024-canadian-consumer-credit-card-report

[3] J.D. Power — 2024 Canada Credit Card Satisfaction Study
https://www.jdpower.com/business/press-releases/2024-canada-credit-card-satisfaction-study

[4] The Nilson Report — Canada Card Issuers and Networks 2024
https://nilsonreport.com/articles/canada-card-issuers-and-networks-2024

[5] Reuters — Bank of Canada to Supervise Payment Service Providers (May 2024)
https://www.reuters.com/business/finance/bank-canada-says-it-plans-more-supervision-payment-service-providers-2024-05-30/

[6] Payments Canada — Real-Time Rail Overview
https://www.payments.ca/modernization/real-time-rail

[7] Statistics Canada — Household Sector Credit Market Summary Table
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3810023801

[8] Statistics Canada — Survey of Household Spending, 2023
https://www150.statcan.gc.ca/n1/daily-quotidien/250521/dq250521a-eng.htm

[9] Statistics Canada — Average Spending by Category (Table 11-10-0222-01)
https://www150.statcan.gc.ca/n1/pub/11-627-m/11-627-m2025026-eng.pdf

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