A recent study published by Technology Strategies International Inc., a leading technology market research firm based in Canada, has found that the value of contactless payments made by Canadian consumers more than doubled over the past year.

According to the report, ‘Canadian Payments Forecast – 2016’, the value of contactless payments transactions increased by about $30 billion in 2015, on the back of more than 1.2 billion transactions.

“The contactless market has evolved to the point where consumers are frustrated if the merchant doesn’t accept contactless payments,” said Christie Christelis, President of Technology Strategies International. “A number of merchants have found it necessary to place signs on their POS terminals apologizing for the inability to accept contactless payments.”

He noted that currently the mobile payments landscape has not yet evolved to the point where it is easy for a consumer to embrace mobile payments. Christelis explained that although some mobile payment options do exist, they don’t work seamlessly for every customer and emphasized on the need for NFC phones to make their way into the market.

Christelis believes that the rapid uptake of contactless payments amongst consumers will simplify the switch to mobile contactless payments at the right time.

The report expects the mobile payments landscape in Canada to change dramatically within the next five years, with more than three quarters of the smartphones in Canada having NFC capability by 2020, and major financial institutions and other key players releasing mobile wallets and applications that are more in line with consumer needs than the current slew of offerings.

Among other things, the report also focuses on the virtual currency business in the country. Last year, the Senate Committee on Banking, Trade and Commerce published a report in November on an assessment of the challenges and opportunities associated with digital currencies, which recommended the Canadian government to exercise a “light regulatory touch” and create an environment that fosters innovation in digital currencies and related technologies.

In this context, the report from Technology Strategies International found that the usage of Bitcoin has doubled over the past year in Canada.

Other key observations made in the study include:

• Debit and credit card payments accounted for more than 60% of personal consumption expenditure in 2015
   
• Debit card transactions and credit card transactions will exceed cash transactions in 2016 and 2020 respectively
   
• Cash usage is declining, but at a relatively low rate
   
• Smart phone penetration is likely to reach 90% by 2020
   
• Online payments continue to experience high growth