Canadian e-commerce and payments

Canada is a sophisticated and diverse e-commerce and payments market

Countries Canada

Intro Canada

Canada is a lucrative and high-spending e-commerce market. Localisation is crucial to success, particularly in the French-speaking areas. Merchants entering the market should also factor in increased carrier costs when serving remoter and rural communities.

Canada’s economy is forecast to grow by 3.9% in 2022 and 2.85 in 2023 [1]. The average Canadian earns US$43,450 a year, 27% more than the average EU citizen [2]. By the second quarter of 2022, unemployment was 5.3% [3], high by current standards in the developed world but low by recent Canadian standards.

In the first quarter of 2022, the volume of Canadian retail sales rose by 8.5% in comparison to the same time last year [4]. This trend may not hold in the face of an uncertain international and economic situation.

Canada’s e-commerce market

Canadians are less likely than their American neighbours to shop online. Only 8% of Canadian retail sales are made online, compared to 15% in the US [5]. The most popular online purchase categories are travel (27%), electrical goods (20%) and beauty products (18%) [5].

The total Canadian e-commerce market is worth $80 billion and is growing at a rate of 17% a year [5]. As well as being less likely to shop online than Americans, Canadians are also less likely to shop using a mobile device. Just 36% of online purchases were completed on a tablet or smartphone [5].

Around 30% of Canadians now do their grocery shopping online, double the figure from before lockdown [6]. Talking to eMarketer, Toronto-based retail analyst Marina Strauss predicted that the pandemic will permanently alter Canadian’s shopping habits: bad news for brick-and-mortar stores but good news for e-commerce merchants [7].

Payment methods in Canada

The Canadian market for payment methods is dominated, though not overwhelmingly, by cards. Canadians are even more fond of credit cards than Americans. 66% of all online purchases are paid for by card [5]. But that doesn’t mean that payment alternatives aren’t significant in Canada. Canadians pay for 23% of online purchase using an e-wallets, 7% by bank transfer, 1% with cash, and 3% by various other payment means [5]. Looking specifically at the card market: Visa has a 40% market share, local schemes 32%, Mastercard 25%, and American Express 1% [5].

Enabling and limiting factors in Canadian e-commerce

One hundred percent of Canadians now have a bank account [5]. High rates of inclusion hold broadly true across the social spectrum, with 99.8% bank-account penetration even among the poorest 40% of the population [8]. Where financial exclusion does exist, it mainly impacts very low-income Canadians, including poorer ethnic-minority and First Nations communities. The organisation Prosper Canada reports that only 20% of Canadians with an income of less than $20,000 have opened a tax-free savings account [9].

94% of Canadians have a fixed-line broadband connection [5]. Rates in rural areas are much lower, with 27% of rural households having access to the Internet via wireless services, but not fibre, cable, or DSL [10]. But as over 80% of the population lives in urban areas, the absolute number of rural households without a fixed connection is still small [11]. And the Canadian government has pledged to increase broadband speed to 10Mbps for wireless services and unlimited for broadband [12].

Canada ranks 20th out of 160 countries in the World Bank’s Global Logistical Performance Index [13]. Parcel numbers handled by Canada Post increased by 22% in 2020, the result of a lockdown-fuelled increased in e-commerce volumes [14].

Footnotes:

  1. https://www.imf.org/en/Countries/CAN
  2. https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?end=2020&locations=CA-EU&start=2010
  3. https://www150.statcan.gc.ca/n1/daily-quotidien/220408/dq220408a-eng.htm
  4. https://retail-insider.com/retail-insider/2022/03/mixed-trends-in-canadian-retail-sales-in-spring-2022-strapagiel
  5. Original PPRO research.
  6. https://www.cbc.ca/news/business/grocery-delivery-pandemic-1.5869903
  7. https://www.emarketer.com/content/canada-ecommerce-will-continue-boosted-by-necessity
  8. https://datatopics.worldbank.org/g20fidata/country/canada
  9. Investor Brief: Promoting Financial Inclusion in Canada’s Financial Services Sector, October 2013, Shannon Rohan, SHARE.
  10. https://crtc.gc.ca/eng/publications/reports/policyMonitoring/2020/cmr4.htm
  11. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710011801
  12. https://crtc.gc.ca/eng/internet/internet.htm
  13. https://lpi.worldbank.org/international/global
  14. https://www.statista.com/statistics/734804/parcel-volume-of-canada-post

Popular Payment Methods in Canada

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Quick facts

happening across Canadian cities, the number of people shopping online using their smartphones is set to rise by a CAGR of 15.3% until 2023.

Canadian e-commerce will continue to grow throughout 2021 dramatically, because — according to a survey carried out by Google — consumers are still too wary to return to brick-and-mortar stores.

According to the OECD the Canadian economy will grow by 6.1% in 2021 and 3.8% in 2022, if COVID restrictions are loosened in the second half of 2021 and demand for Canadian goods returns.

General Information

  • Population 37.7m
  • Population 15 + 32.1m
  • Online Population 35.5m
  • Area 9,984,670 km2
  • Currency CAD
  • GDP 1643.4bn USD
  • GDP per Capita 43,278 USD

Payment types

  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"66"},{"label":"Cash-based payments","value":"1"},{"label":"Bank transfer","value":"7"},{"label":"Wallets","value":"23"},{"label":"Other","value":"3"}]

Banked population
  • Canada 100%
  • North America 94%
  • World 67%
Credit card penetration
  • Canada 83%
  • North America 67%
  • World 19%
Internet penetration
  • Canada 94%
  • North America 90%
  • World 62%
Smartphone penetration
  • Canada 83%
  • North America 84%
  • World 70%

The E-Commerce Market

Top e-commerce segments 2019 | 2020

  1. Airlines & Hotels: 47% | 27%
  2. Electrical Goods: 15% | 20%
  3. Health & Beauty: 14% | 18%
  4. Toys, DIY, & Hobbies: 10% | 13%
  5. Homeware & Furniture: 8% | 12%

Cross-border e-commerce

  1. Cross-border proportion of total e-commerce – 20%
  2. Value of cross-border e-commerce ($US billion) – 14.0
  3. % of online shoppers who have shopped cross-border – 63%

Top 3 cross-border shopping origin markets

  1. USA: 49%
  2. China: 42%
  3. UK: 4%
E-commerce % of total retail
  • Canada 8%
  • North America 11%
  • World 20%
E-commerce completed on a mobile device
  • Canada 36%
  • North America 47%
  • World 53%

E-Commerce Trends

  • E-commerce market size ($US billion) 71.2bn USD
  • E-Commerce spending per capita ($US) 1,872 USD
  • E-commerce spending as % of GDP 4.2%

The Credit Card Split

  • Visa
  • Mastercard
  • American Express
  • Local Schemes
  • Other
[{"label":"Visa","value":"40"},{"label":"Mastercard","value":"25"},{"label":"American Express","value":"1"},{"label":"Local Schemes","value":"32"},{"label":"Other","value":"2"}]

The information on our Insights pages has been compiled by us in cooperation with Datamatics and Wright & Brown. The data shown is partially owned by us and partially owned by GlobalData. © 2021 by PPRO Financial Ltd. No data and information can be used for any further publication without the explicit approval of PPRO.

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