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Canadian Payments Landscape Altered by COVID-19
Tuesday, May 10, 2022
ROCKVILLE, Md., May 2, 2022 /PRNewswire/ -- Two years after the onset of the COVID-19 pandemic, total consumer spending has recovered to 2019 levels and the overall economy is on the road to full recovery. Nonetheless, as reported by Packaged Facts' Canadian Credit Card Market Outlook (April 2022), the payments landscape remains altered with regard to where consumers spend their money, the channels used for spending money, and how consumers choose and interact with their payment products.
In March 2020, as "non-essential" businesses closed, consumer spending in retail categories like furniture and clothing plunged; furniture spending, for instance, dropped 26% year-over-year (YOY) and clothing spend dropped 52%.
The credit card industry (inclusive of merchants, processors, card networks, and issuing and acquiring banks) was similarly hit hard when mainstay spending categories were negatively impacted. Consumer spending for travel, hotels, and dining were all challenged by lockdowns, pandemic variants, labor shortages, and border closures.
For the previous two decades, according to Packaged Facts analyst Elizabeth Rowe, credit card debt had grown at an average annual rate of 20.7%. From 2000 to February 2020, outstanding debt rose from $13.2 billion to $90.6 billion. The pandemic reversed that trend, and May 2020 saw the nation's first decline in outstanding credit card debt in at least 20 years. On a quarterly basis, household credit card debit hit its highest level in Q4 2019 and then began a long decline that did not bottom out until Q1 2021.
Payments Canada data show that, from 2015 to 2020, the value of Canadian payments (across all product types) grew 6%, but this growth was not evenly distributed. Checks and cash were down significantly, while online transfers, EFT, and credit cards experienced decisive growth.
Looking ahead, Packaged Facts estimates that Canadian credit card purchase volume will total $644 billion by 2025.
About Packaged Facts
Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, the food and beverage market, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through MarketResearch.com.
Press Contact:
Corinne Gangloff
+1 440.842.2400
cgangloff@packagedfacts.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/canadian-payments-landscape-altered-by-covid-19-301537613.html
SOURCE Packaged Facts
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