Gen Zers Lead the Charge as Canadians Embrace Mobile Debit Transactions

In-store debit card payments made using mobile devices in Canada surged 53% during the 12-month period ended July 31, compared to the same period a year earlier, according to Interac Corp., Canada’s national debit network. In addition, e-commerce transactions made using a mobile device increased 17% year-over-year during the same period.

In total, Interac reports that more than 1 billion mobile transactions took place in the 12-month period ended July 31. It is the first time Interac has recorded more than a billion mobile transactions for a 12-month period, the network says.

A key driver behind the mobile surge is the Gen Z cohort (those born between 1997 and 2013). Among this demographic, 78% routinely pay using their smart phones, compared to 42% of Gen Xers (born between 1965 and 1980), which was the first generation to grow up using computers. While Gen Xers are considered tech-savvy, a key point of differentiation between them and Gen Zers is that the older cohort tends to have more concerns about the security of mobile and contactless payments, according to Interac.

Nevertheless, Gen Zers are influencing their parents’ payment habits. Some 41% of Gen Xers who responded to a recent Interac survey say they embrace payment options only after they have seen friends and family use them. At the same time, 52% of Gen Z respondents say they have taught older family members how to pay with their phone.

“While many Canadians shifted to contactless early in the pandemic, our data shows consumers are now going a step further as mobile payments become mainstream, particularly as younger Canadians influence those around them to follow suit,” Interac chief commercial officer William Keliehor says in a statement. “Debit remains central to the way Canadians choose to pay, even as in-store and e-commerce transactions take new forms.”

Gen Zers are also more inclined to pay by debit, according to Interac’s research. Some 53% of Gen Zers who use their smart phone to initiate payment list debit as their preferred payment method, while 76% say they believe Canadians should always have the option to use debit when checking out online, making a purchase in an app, or paying in store.

Merchants where Canadians are actively using their mobile payment to make a payment include gas stations and restaurants. Gas stations in Canada saw a 48% increase in Interac mobile debit transactions compared to a year earlier. In addition, restaurants and eating places saw a 63% year-over-year increase in mobile debit purchases, while fast-food restaurants saw a 40% year-over-year increase.

“We’re exploring the ever-evolving ways Canadians are connecting to the digital economy—whether it’s by making purchases, paying their transit fares, or supporting small businesses,” says Keliehor.