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Canadians’ Usage of E-Commerce and Contactless Payments Up by 23% During COVID-19

Aug. 19, 20
6 mins
Young woman sits in front of a computer and softly smiles while looking off into the distance.

During COVID-19, the number of Canadians using e-commerce or contactless payments at least half the time has increased by 23% (from 60% to 74%), according to a national survey conducted by RATESDOTCA.

Seven-in-ten consumers (68%) say they will continue to shop this way at least half the time after the pandemic, suggesting a long-term shift in spending habits and behaviours.

As the country reopens and life becomes more ordinary, some Canadians will pull back and resort to their regular spending habits. However, 8% of consumers say these customs will be the new normal.

Which Canadians are spending more?

Canadians are reworking their budgets. Not only are consumers changing how they are shopping but what they are buying and how much they are spending.

Groceries

Just over half (53%) of consumers saw their average monthly spending on groceries or food delivery increase, with Ontario (60%), Alberta (59%) and British Columbia (57%) out in front.

Canadians spending more on groceries

Region Percent of consumers
Alberta 59%
British Columbia 57%
Manitoba/Saskatchewan 46%
Ontario 60%
Quebec 38%

While 43% of Canadians saw an increase of less than $200, 10% say they are spending $200 or more than they would have before the crisis.

An increase in grocery spending

Increase in spending Percent of consumers
Less than $50 16%
$50 to $199 27%
$200 to $499 8%
$500 or more 1%
No increase 45%
I don’t know 3%

Less than half of Canadians (45%) saw no increase in grocery spending at all.

Technology

Only two-in-ten Canadians (20%) saw their spending increase on technology or connectivity during the pandemic.

An increase in spending on technology or connectivity

Increase in spending Percent of consumers
Less than $50 10%
$50 to $199 6%
$200 to $499 3%
$500 or more 1%
No increase 76%
I don’t know 4%

As the country sent students home and shut the doors on businesses, many Canadians found themselves resorting to online schooling, virtual meetings and digital hangouts. Although many video conferencing apps allow people to use a version of their service for free, this number is unexpectedly low.

Age of consumers who spent more on technology or connectivity

Increase in spending Percent of consumers under age 35 Percent of consumers aged 35+
Increased by under $200

24%

13%

Less than $50

13%

9%

$50 to $199

10%

4%

Increased by $200 or more

7%

3%

$200 to $499

6%

2%

$500 or more

1%

1%

No increase

64%

80%

I don’t know

5%

4%

Unsurprisingly, the younger tech-savvy generation outspent older Canadians. Eighty percent of older Canadians (35 and over) saw no increase in spending in this category.

Home furnishings and renovations

Canadians are keen on home renovations and at-home projects. Two-in-ten of Canadians (22%) increased their monthly spending on home furnishings, renovations, gardening and the like, especially younger consumers and Quebecers.

Canadians who increased their spending by $200 or more on home upgrades

Region Percent of consumers
Quebec 12%
Rest of Canada 6%

Double the number of Quebecers spent $200 or more on home furnishings or upgrades than the rest of Canada (6%).

Age of Canadians who increased their spending on home upgrades

Increase in spending Percent of consumers under age 35 Percent of consumers aged 35+
Increased by under $200 20% 13%
Increased by $200 or more 7% 8%
No Increase 69% 76%
I don’t know 4% 4%

Younger Canadians (under 35) were nearly twice as likely to increase their spending on home upgrades than those aged 35 and over. Over three-quarters of older Canadians (76% of those aged 35+) saw no increase at all.

Retail

Lastly, 20% of Canadians saw their average monthly spending increase in retail, particularly younger consumers.

An increase in retail spending

Increase in spending Percent of consumers under age 35 Percent of consumers aged 35+

Increased by under $200

24%

14%

Less than $50

13%

8%

$50 to $199

11%

7%

Increased by $200 or more

6%

2%

$200 to $499

5%

2%

$500 or more

1%

<1%

No Increase

66%

80%

I don’t know

4%

4%

While Canadians aged 35 and over couldn’t be bothered with retail purchases, 80% saw no increases in spending at all.

Further findings

The study also revealed that younger Canadians are more willing to consider getting a new credit card, while older Canadians are more set in their ways. Seventy-one percent of consumers under 35 would consider getting a new card, compared to 49% of those aged 35 and over.

Canadians who would consider getting a new credit card

Considerations Percent of consumers under age 35 Percent of consumers aged 35+

Would consider getting a new credit card

71%

49%

Would never consider getting a new credit card

22%

40%

When breaking down the details, these are the reasons why Canadians would consider getting a new card.

Reasons for getting a new credit card

Reasons Percent of consumers  

An appealing welcome bonus or promotional offer

28%

Bank or issuer changes features or forces migration to a new credit card

20%

Changes in lifestyle/goals/spending

11%

Looking to access more credit

9%

Change in employment/income/credit score

8%

Recommendation from friends

6%

Other

2%

I would never consider getting a new credit card

35%

I don’t know

10%

Although many Canadians have increased their use of e-commerce and contactless payments, and spending in certain areas, only 11% of consumers would consider getting a new credit card because of lifestyle, goal, or spending changes. However, as these new shopping trends emerge, Canadians should evaluate whether their credit cards are offering the best value for their shopping habits.

If Canadians make smart decisions about their payment choices, it could save them money.

Making smart payment choices

Canadian consumers have several payment options; however, only one offers rewards and savings. When cardholders find a credit card that fits their lifestyle, they may be able to reap the most rewards or cashback.

For example, the Best of Finance 2020 winner for the best credit card for families was hands down the President’s Choice Financial® World Elite Mastercard®. The card offers grocery rewards and the power to earn points as a family.

Using the Best of Finance methodology, families can expect to see around $476 back in PC Optimum points in the first year. That is accounting for $2,000 in credit card purchases per month, with $500 on groceries. As Canadians spend more money in the grocery category, they can expect even more rewards.

Under similar circumstances, using a cash back card that offers 1.25% back on all purchases like the SimplyCashTM Card from American Express, families would earn around $375 over that period, significantly less than when using the grocery rewards card.

By breaking down your budget and determining how you are spending money, you can choose the best credit card for your spending behaviours and needs.

Visit the RATESDOTCA credit card marketplace to compare the top credit cards in Canada. Select the type of credit card—travel, cash back or both—whether you are interested in a low-interest rate or perks and if you mind an annual fee. From there, you can sort your top picks by the first-year value, welcome bonus, annual rewards and more.

About the survey

A digital survey of 1,523 working Canadians aged 18 years or older was conducted by Leger Marketing on behalf of RATESDOTCA from June 10 to June 12, 2020, using Leger’s online panel. No margin of error can be associated with a non-probability sample (web panel in this case). However, for comparative purposes, a probability sample of 817 respondents would have a margin of error of ±3.4%, 19 times out of 20.

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Hayley Vesh

Hayley Vesh is a creative, resourceful, and knowledgeable content producer who is passionate about financial literacy, storytelling, and generating ideas. She writes about credit cards, savings, debt management, and personal finance. In her spare time, Hayley can be found wandering in the woods, hunting for second-hand treasures, or curled up with a steeped tea and a good podcast.

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