Stephen Yun
Senior Analyst, Market Insights, Payments Canada
The COVID-19 pandemic accelerated the shift towards digital payments in Canada and there’s no sign of it slowing down.
Since the onset of the pandemic, many aspects of our lives have changed. The way we pay and get paid is no exception. This is especially true for retailers.
Understanding payment pain points
Payments Canada recently conducted a survey looking at the payment challenges experienced by small and medium-sized enterprises (SMEs) in Canada, many of whom are retailers.
The payment pain points experienced the most by SMEs are the delay with incoming and outgoing payments, with 29 per cent of SMEs experiencing it over the past six months. Further challenges include additional fees (31 per cent), followed by processing delays (21 per cent), and managing cash flow (21 per cent).
Additionally, 17 per cent of the time, SMEs also reported security as their biggest payment challenge which more than doubled from 2022.
Exploring the benefits of digital payments
The pandemic highlighted the convenience of everything digital, including digital payments. Expanding payments with digital options has been important in attracting and retaining customers.
Access to credit is a critical lifeline for retailers, especially in times of economic downturn. An emerging payment option like buy now, pay later (BNPL) could be beneficial as it allows consumers to pay for their purchases through a series of installments. As BNPL services become more popular, retailers may gain or maintain a competitive advantage by offering this payment option.
Digital payments are perceived to be more secure than paper and card payments. With many small businesses experiencing an increase in payment fraud attempts (89 per cent year-over-year), the convenience and security of digital payments have become increasingly alluring.
Learn more about the future of payments
Future payment innovations present opportunities that will allow retailers to overcome their current payment challenges. While there are challenges, there is also a lot of opportunity to innovate and provide the best solutions for SMEs.
Learn more at The Payments Canada SUMMIT, from May 29-31, 2024, in Toronto.
