The Top Payment Trends to Look Out for in 2021

Throughout 2020, the Canadian payments ecosystem experienced a shift toward digitization on a scale never seen before.

Financial institutions (FIs) and financial services incumbents are competing on a whole new playing field, up against an increasing number of players in the Canadian fin tech ecosystem. Here are some key payments trends that incumbents should watch out for in 2021.

PayTechs

The PayTech sector was extremely active during 2020, with Buy Now Pay Later becoming the most dominant trend. Thiswas accelerated by the pandemic as people looked for neww ays topay for their purchases. Prepaid is also enabling innovative use cases in the market, including early payroll access.

Challenger banks

Challenger banking continued to make headway into the Canadian market in 2020, and as of December, there are 30 challenger banks in Canada. There’ s a huge white space for a challenger banking solution for small- and medium-sized businesses in Canada. Incumbents need to watchout for challenger banking solutions, especially if tech giants start to enter Canada with similar digital banking offerings.

TechGiants

Tech Giants like Google, Amazon, Shopify, and Apple are methodically launching their payments offerings in Canada, substantially increasing competition in the industry. They’ re partnering with F Is, as seen in Google’ s partnership with BMO and Shopify’s partnership with both Evolve Bancorp and Stripe. This shows that some FIs are taking a partnership route to innovation.