Driven by online commerce, immigration and ever more convenient applications, Canadians are transferring money abroad more than ever. One in five Canadians sent money internationally last year, a proportion up 33% compared to 2022, reveals a recent study by Payments Canada.
The organization that oversees financial transactions in the country says nothing about the total amount sent abroad. However, the amount is undoubtedly very significant, since the proportion of Canadians who transact internationally has reached 20% in 2023, compared to only 15% the previous year.
” We see that [les Canadiens] transfer more to other individuals and that they use more international retailers. So, it is mainly because of the growth of e-commerce that we are seeing this level of growth,” explains in an interview with The duty Director of Research at Payments Canada, Jon Purther.
The increase in the number of immigrants to Canada, many of whom send remittances to their families back home, also contributes to this ever-increasing monetary flow abroad. “ [Il y a un] growing number of person-to-person payments internationally. Is it that [l’immigration] is one of the factors? I think that’s a fair statement,” agrees Jon Purther.
India (12%), China (10%) and Nigeria (10%) form the three largest payment destinations, after the United States, which alone represents half of international transfers.
The multiplication of channels for moving amounts outside of Canada also encourages the increase in these exchanges. These transfers are no longer limited to systems like Western Union. The PayPals of this world have gained importance in recent years and users are taking advantage of it. No less than 31% of international transactions between individuals were carried out last year using a banking application, compared to 13% for Western Union. There is now “a wide range of options” which allows, depending on the situation, “to be more comfortable with international payments”, says Mr. Purther.
Cryptocurrency, not yet a currency of exchange
Virtual currencies, like the famous bitcoin, still remain today an investment product rather than a means of payment. “We thought it would be an easy way to move money, but it’s not,” says Jon Purther.
In figures, 72% of Canadians say they have never used virtual currency to send money internationally and just slightly fewer (67%) say they do not plan to do so in the next year, according to the data from the study published in March.
PayPal is trying to reverse this trend with a so-called “stable” cryptocurrency, backed by the value of the American dollar, and launched last fall. This alternative, which is supposed to boost the number of transactions between digital wallets, seems to convince several Americans, the first users of this innovation. The virtual currency was used for US$328 million in transactions last April, a growing statistic.
About 10% of Canadians owned bitcoin as of December 2022, according to data from the Bank of Canada.
This report is supported by the Local Journalism Initiative, funded by the Government of Canada.