Punching in a security pin is rapidly becoming passé for Canadian credit card users when making small purchases. Cards equipped with technology that allows a user to pay with a simple wave or tap of a card is surging, new data shows.
At Alternative Banking Solutions, the dollar volume of contactless payments made across its terminals jumped 162 percent in the three months between January and April, 2016, compared to the same three-month stretch a year ago.
Purchases at drug stores, gas stations and convenience stores were the chief drivers of the spike.
Canada’s two biggest card providers, Visa and MasterCard, have offered cards with contactless technology for the past several years, but it now appears usage has hit a tipping point.
One big reason for that is the number of merchants, or store owners, that have terminals that can handle tap payments appears to have hit a critical mass.
Visa says contactless transactions represented 12.1 percent of all store purchases made by cardholders in June 2014. That number was approaching nearly a quarter of purchases on Visa cards in June 2015.
At MasterCard, which has been quicker to roll out tap-enabled cards, 27 percent of in-store purchases were contactless as of January, a spokesperson said.
The Bank of Canada found credit is rapidly overtaking the use of cash in retail transactions: cash still accounted for 44 percent of transaction volumes in 2013, but that was down fully 10 percentage points from 2009. Debit transactions also fell.
Related Reading: Consumers Would Rather Tap Than Wait