Adyen Index: Digital Report reveals three ways Canadian digital business can drive growth

Today, Canadian online businesses face challenges and opportunities from a number of directions, with subscription fatigue, increasing complexity in the payment method landscape, and navigating how to leverage payment data among them. We surveyed over 34,000 consumers and 8,800 businesses in 23 markets (including 2022 consumers and 400 digital merchants aged 18+ in Canada) to uncover what online businesses and their customers see as their biggest obstacles, and offer insights in our Digital Report. 

To set the scene, Canadian businesses are optimistic overall. In terms of plans for growth, half of the online enterprises in Canada (and globally) say they are more focused on increasing revenue in 2024 compared to last year. Furthermore, a significant majority (66%) of Canadian businesses are aiming to expand internationally. 

Here is a cross section of the key challenges, and some insights on how to overcome them.

1. Overcoming subscription fatigue

Canadian businesses see a huge potential in subscription business models. The vast majority (73%) say that they will be investing in repeat purchase models over the next year, and almost half (42%) say that they are expanding their offerings to include new product lines or services. 

However, Canadian consumers don’t necessarily feel so positive. While Canadian consumers are signed up to an average of three subscriptions, paying $19 for each service, 37% have already, or are planning to, unsubscribe from services and products they’ve set up recurring payments with over the next 12 months. This spells potential trouble ahead for businesses that believe that adopting or expanding their subscription offers will drive revenue growth. 

Nonetheless, the potential is there. A subscription is an investment and a commitment, so rewards are expected. Personalization and loyalty can help keep consumers engaged with their subscriptions. Almost half (47%) of Canadian consumers say that great customer service would make them more loyal to an online brand, and 40% say that personalized discounts would do the same. Globally, film and TV services are the most popular subscriptions (71%), followed by music streaming platforms (49%)

“Canadians are increasingly mindful of their spending, and our research highlights the need for subscription businesses to not only provide exceptional services but to also personalize the experience to earn their subscribers’ repeat business," said Sander Meijers, Country Manager of Adyen Canada.

2. Rising complexity around payment methods

The way people pay is becoming ever more diverse, with expectations differing based on a range of factors, including culture, industry, age, and location. While most consumers, such as those in Canada (67%), the US, and the UK, prefer to make online payments with credit cards, the relevance of other local payment methods is growing rapidly worldwide. 

In parts of Asia, for instance, 40% of consumers prefer using digital wallets like Apple Pay and Google Pay™ to pay online, while only 19% of consumers in Canada prefer digital wallets. Buy Now, Pay Later is also enjoying its time in the spotlight, gaining popularity in European markets, while only 5% of Canadian consumers prefer using it. And Pay by Bank is a rising local payment method in markets such as Brazil (41%) and Hong Kong (22%). 

In Canada, debit cards (44%) and online banking (24%) are the second and third most preferred methods to make online payments after credit cards (67%).

Offering a range of up-to-date payment options that reflect local preferences is the key to a smooth payments experience and an increase in conversion. In fact, nearly 79% of Canadian consumers surveyed will be deterred from making a purchase if their preferred payment method is not available online, and 47% of Canadian consumers will abandon their cart altogether. When choosing the appropriate mix of payment methods, these are the three factors to consider:

• Geography – where are your customers located?

• Demography – what age range do your customers fall in?

• Context of the purchase – what are you selling?

Further, a local touch is critical for online businesses looking to accept payments globally. Payments processed using local acquiring often cost less and are more likely to be authorized.

3. How to leverage payments data

The vast majority of Canadian digital enterprises (77%) are looking at data-rich payments insights to uncover new growth areas for their business. This challenge spans a variety of areas; including: 

• Leveraging data to build superior customer journeys and drive loyalty.

• Supporting new payment methods as they expand into different markets. 

• Managing risk, even as fraudsters adopt new methods and technologies to carry out attacks. 

Payments data can help with creating a 360-degree business overview based on your customers' payment histories. This overview helps reveal customers' needs, wishes, and preferences, allowing you to boost customer experience, build loyalty, welcome new audiences, and grow revenue. From optimizing online promotions and loyalty programs to improving personalization and adapting to suit consumers' expectations in a new market, payments data can play a vital role in strategic decision-making.

As technology continues to advance, fraudsters are developing increasingly sophisticated methods to cheat the system, and online payment fraud is the most prevalent and fastest-growing. 56% of Canadian businesses surveyed said payment fraud and chargebacks pose a significant cost to your business. Technological advancements such as one-click payments make it harder for banks to detect and block fraud, while the dark web helps fraudsters cheat the system at a bigger scale. However, advances in technology also mean fraud and risk trends can be managed. By leveraging payments innovation, businesses can now detect and prevent fraud faster, while reducing its negative impact with features such as smart authentication.

Want to know more? 

How can businesses keep up to date with the ever-evolving industry as digital transformation sweeps across different industries? The key is to shift perspective – digital enterprises need to leverage payments strategically as a revenue driver to gain an edge in a highly competitive industry.

Unlock our full report today – discover expert analysis on the research, plus insights and best practices for online businesses in North America, including:

• Key insights to simplify global complexities. 

• Ways to leverage data to grow revenue and lower operational costs. 

• Drive strategic growth through increasing customer loyalty and combating fraud.