Contactless debit and credit card payments are being increasingly adopted in Canada and are likely to account for important transaction volumes and values by 2014, a recent study points out.

According to the research conducted by Technology Strategies International, a Canadian technology market research company, contactless payments have managed to gain ground on the Canadian market in 2009, with issuers and acquirers undertaking major efforts to expand contactless payments in appropriate payment settings.

Moreover, the report highlights the significant demand for mobile payment services in Canada. The latter continue to be a major point of attraction for payments companies, banks and acquirers, especially in the face of increasing smartphone usage in Canada. Over the next five years, growth in mobile payments is expected to occur primarily on the back of developments in the contactless payments space, the same research reveals.

The study has also shown that the impact of the recession in the field of consumer payments had visible results in the declining volume of cash withdrawal from ABMs, cash purchases, credit card purchases and credit card cash advance.

However, competition has intensified on the Canadian debit payments market since global players MasterCard and Visa have managed to establish partnerships with major issuers in order to launch alternative debit payment products in Canada – a market currently dominated by Interac.

The research has also indicated that cross-border payments are set to grow rapidly, with the entry of scheme debit stimulating growth in both the outbound and inbound cross-border payments segments. In addition, alternative payment methods (i.e. non-credit card payments) will account for one third of all the online payments made by Canadians by 2014 whereas cash is expected to remain the most frequently used form of payment in Canada over the next five years.