December 15, 2017 by David Gambrill, Editor-in-Chief
It may not be as far away as you think. The most recent annual study by Payments Canada, delegated by the Canadian government to provide the country’s national payments systems, observes that “social media payments are just around the corner, thanks to new partnerships in fintech.”
“If China’s Alipay and WeChat Pay are any indication, a trend to watch is the rise of social media payments,” Payments Canada said in commentary on this year’s Canadian Payment Methods and Trends (CPMT) report. “While they have yet to hit the mainstream in Canada, the increased collaboration between new-entrant fintechs and Canadian financial institutions suggests a new level of convenience for banking and payments is on the way.”
Bank customers will start to see better integration of Interac e-Transfers with social media, the report states. For example, RBC recently began enabling the initiation of Interac e-Transfers through Siri voice command (in Apple devices). In addition, several Canadian finTechs have begun to partner with Canadian banks to enable “chat bot” banking services, which will include the ability to make bill payments and send Interac e-Transfers through iMessenger or Facebook messenger.
“Current pilot projects are leveraging traditional payment methods such as credit and online transfers on social messenger services. It is likely the use of the more ubiquitous Facebook, Google, and Apple messenger services will hold the most promise for social media payments in Canada,” Payments Canada observes.
In the meantime, credit cards remain the payment method of choice at point of sale, totalling more than $462 billion in 2016. In fact, Canada has become a global leader in credit card use, thanks largely to transactions being done increasingly through online and in-app channels. Examples include the friction-free payment experience of Uber or iTunes, where more than 90 per cent of transactions are completed via credit cards.
Electronic funds transfers (EFT), often associated with payroll and consumer bill payments, surpassed cheque value for the first time in 2016. “Despite hitting this milestone, EFT use declined overall as more and more Canadians set themselves up for recurring bill payments — such as car insurance and utility payments — on their credit cards to earn rewards,” Payments Canada said.