Canadians Have Polarizing Views on Evolving Payment Innovations With Security Concerns Being Top-of-Mind, Reveals New Payments Canada Study

Canadians are divided in embracing evolving technologies that have the potential to change our shopping experiences along with how we pay and get paid. Concerns around security, lack of familiarity and a sense of contentment with existing payment and shopping experience technologies impact the appeal of newer innovations. This concern surrounds current and potential innovations like generative artificial intelligence (GenAI), social commerce and pay-by-bank reveals a new study from Payments Canada. “Canadians prioritize security and privacy while also expecting ease and convenience in their shopping experience, particularly in the way they pay,” said Jon Purther, Director of Research at Payments Canada. “They seek innovations that strike a balance between these factors. However, Canadians are divided on the appeal of innovations that have the potential to reshape our shopping and payment experiences, with security being a key concern. In our study, we also found that many Canadians had not yet formed a view around their appeal, which infers that they are reserving judgment until they become more familiar with newer technologies.” Key study findings: Canadians have polarizing perspectives around leveraging GenAI (generative artificial intelligence). GenAI has many applications when it comes to making payments or receiving services. This includes generating personalized discounts or pricing for consumers, providing them with virtual shopping assistants such as chatbots or providing product recommendations. GenAI can also support fraud detection by flagging unusual transaction activities, predicting user payment preferences and auto-filling details to speed up the checkout process while also generating personalized loyalty programs.

• Canadians are divided on using GenAI to improve their work and lifestyle; 43 per cent are interested in leveraging these technologies, 44 per cent are not interested and 13 per cent are unsure.
• Younger Canadians aged 18–34 have more interest (56 per cent) than middle-aged Canadians 35–54 (48 per cent) and older Canadians aged over 55 (31 per cent).
• Fraud detection and prevention is thought to be the most beneficial way of leveraging GenAI among Canadians (45 per cent).
• Canadians have mixed views on the appeal of GenAI to enhance the online shopping experience; 28 per cent consider it appealing, 34 per cent say it’s unappealing to them and 38 per cent say it’s neither appealing nor unappealing.
• GenAI-enhanced online shopping experiences are more appealing to younger Canadians aged 18–34 (39 per cent) compared to middle-aged Canadians (29 per cent) and older Canadians (21per cent).

More than one in 10 Canadians have used social media commerce but security concerns are a key deterrent. Social commerce enables consumers to buy and sell products directly through social media platforms without leaving the platform or app.

• Overall, 12 per cent of Canadians have sent or received money from a friend or family member using social media platforms, such as Instagram, WhatsApp, Messenger or TikTok.
• Overall, 13 per cent of Canadians have made a purchase within social media platforms, such as Instagram, Pinterest and TikTok Social commerce appeals to around one in five Canadians (18 per cent), with 46 per cent who say it is unappealing and 36 per cent who say it’s neither appealing nor unappealing.
• Of those who consider social commerce appealing, reasons include convenience and ease (40 per cent), useful and interesting (six per cent) and a preferential way of purchasing items (five per cent).

Among those who do not find social commerce appealing, key concerns include security (48 per cent), not being of interest or useful (14 per cent), not using or liking social media (10 per cent) and not wanting to make impulsive purchases (five per cent). Pay-by-bank, which allows consumers to make transactions directly from their bank account to the merchant, bypassing traditional payment methods like credit and debit cards, is appealing to 29 per cent of Canadians. Consumers select pay-by-bank (also known as account-to-account) at checkout, typically on an e-commerce website, app or point-of-sale terminal, which then redirects the consumer to their online banking platform or app where they can then approve the transaction.

• Overall, 29 per cent of Canadians find pay-by-bank appealing, 33 per cent do not find it appealing and 38 per cent are neutral. Newcomers to Canada (53 per cent) and gig workers (47 per cent) are significantly more likely to use pay-by-bank.
• The key attraction of pay-by-bank is security with 32 per cent of Canadians indicating it offers greater security. This is because when making an online purchase consumers do not have to enter their credit or debit card information directly on the merchant site. Instead, they are redirected to their online/mobile banking platform to confirm the payment transaction. The payment is made via an account-to-account (A2A) transfer directly from the consumer’s bank account.
• Incentives would encourage Canadians to use pay-by-bank, with 60 per cent more likely to use it with incentives such as cashback offers or rewards points.
• Only 22 per cent of older Canadians would use pay-by-bank, compared to 34 per cent of young Canadians and 28 per cent of middle-aged Canadians.
• Half of Canadians (50 per cent) find passkeys an appealing alternative method of user authentication that eliminates the need for usernames and passwords. Passkeys are integrated into online payments during checkout and linked to the consumer’s bank account, digital wallet or card issuer, with the consumer being prompted to authenticate the purchase with a passkey on their device using biometrics (for example, their fingerprint, facial or voice recognition). Passkeys are considered more secure than passwords because there isn’t a string of characters to memorize, making them harder to hack. Passkeys do not need to be changed, cannot be stolen by someone guessing or peeking over your shoulder, and there is no way to accidentally use one on the wrong website.

Overall, 47 per cent of Canadians say they are likely to use passkeys instead of passwords for logging into their email and online/mobile banking accounts, or e-commerce sites if the option was available. However, 23 per cent do not find passkeys appealing, and 27 per cent remain neutral. Among those that do not find passkeys appealing, key concerns include it being less secure (27 per cent), lack of interest or need (20 per cent), a perception of complexity/finding it confusing (16 per cent), lack of understanding (12 per cent) and lack of trust (seven per cent).