Should Canadian SMBs offer digital wallets like Apple Pay and Google Pay?

If you run a small or mid-sized business in Canada, you have probably seen this scene at your checkout:

Customer taps their phone on the terminal, waits half a second, then asks, “Oh, you don’t take Apple Pay?”

In that small moment, you face a decision. You can ask them to pull out a plastic card or even cash. Many do. Some shrug and go through with it. A few quietly decide to buy somewhere else next time.

So the question is simple on paper and a bit messy in practice:

Should Canadian SMBs offer digital wallets such as Apple Pay and Google Pay, or is that just extra tech and extra fees for the same sale?

This article walks through that question step by step, with a focus on real numbers, trade-offs and cash flow.

What “digital wallets” really mean for a Canadian merchant

For this discussion, digital wallets are services that let customers store card details or account credentials on a phone, watch or browser and pay with a tap or a click.

Common examples in Canada:

• Apple Pay
• Google Pay
• Samsung Wallet
• Interac debit inside a mobile wallet
• Bank apps that support tap-to-pay and in-app checkouts

In many cases, digital wallets still run on the card rails you already use. A customer taps their phone; behind the scenes the wallet sends a token that stands in for their card number. The processor treats it as a contactless card transaction with some extra security features such as tokenization and device-level checks.

So from a pure payments angle, digital wallets are less of a separate system and more of a new “front door” for the same networks. The question then shifts from “Is this new?” to “Does this make life better for customers and for the business?”

Where Canada stands on digital wallets today

Canada already leans heavily on digital payments. Payments Canada data shows that in 2023, electronic and card payments made up most day-to-day transactions, with Interac debit alone reaching around 6.5 billion transactions and over 1.16 billion Interac e-Transfers in a single year.

A few signals give context for digital wallets in particular:

• OTT Pay cites that cash accounted for only about 5.4 percent of Canadian payments as far back as 2020, with mobile wallets growing fast as contactless use spread.
• A Bank of Canada study on mobile payments notes that only about 10 percent of Canadians aged 15+ used a virtual wallet in 2020 and around 16 percent made mobile payments, which suggests room to grow compared to markets such as the United States and China.
• Global research cited by PayDo projects that digital wallets will handle over 16 trillion US dollars in payments by 2028, up from about 9 trillion in 2023, with users rising from 3.4 billion in 2022 to a projected 5.2 billion in 2026.

Noda’s recent overview of payment methods in Canada highlights mobile wallets like Apple Pay and Google Pay alongside Interac, cards and buy-now-pay-later as part of the expected mix at checkout for local shoppers.

So Canadians still tap plastic cards more than phones, yet trends point clearly in the direction of digital wallets gaining ground. For an SMB, that mix matters more than global numbers. The key issue is whether your specific customers already pay this way or soon will.

What digital wallets change at the counter and checkout

Digital wallets affect three areas that owners feel every day:

1. Speed and convenience at checkout
2. Perceived security and trust
3. Conversion rates and cart abandonment online

1. Speed and convenience

Contactless has already trained Canadian customers to expect quick taps rather than chip-and-PIN. Interac notes that contactless debit accounts for a large share of card volume and that retailers gain shorter queues and smoother flows at busy times.

Digital wallets extend that habit from the card to the device. A typical flow:

• Customer holds phone or watch near the terminal
• Device authenticates with fingerprint or face scan
• Transaction completes in roughly the same time as a card tap

In store, that saves seconds per sale, which sounds small yet adds up during rush periods. In e-commerce, the effect is bigger. Customers who pay with digital wallets skip manual entry of card details, expiry dates and postal codes. Many merchant case studies show that express checkout buttons raise completed orders and lower cart abandonment.

2. Security and trust

Interac and several processors stress that digital wallets bring multiple security layers: device-level authentication, tokenized card numbers and strong encryption.

From the shopper’s point of view:

• The store never sees the actual card number
• Lost cards stored in the wallet can be disabled through the bank
• Lost phone still needs face or fingerprint to pay

Surveys used in payment industry reports show that many consumers now view digital wallets as safer than physical cards for tap payments and online purchases.

For merchants, that sense of safety cuts both fraud risk and support burden. Fewer customers call to ask about “mystery charges” when they see clear wallet transaction records on their phones.

3. Conversion impact

Noda points out that Canadian shoppers expect fast, simple options at checkout and that missing preferred methods can cost sales. PaymentCloud and other providers in similar markets share data that suggests win rates improve when merchants add digital wallets alongside cards and Interac.

For a small Canadian merchant, that impact may appear in ways such as:

• Fewer abandoned carts on mobile
• More impulse purchases in-store, since the customer’s “wallet” is already in their hand
• Better experience for tourists and international visitors who rely on their phones

That last point grows in importance for retail zones, hospitality and tourism-heavy regions.

Pros and cons of offering digital wallets for Canadian SMBs

To keep this grounded, it helps to lay out advantages and trade-offs side by side.

Main advantages

1. Customer expectation and experience

Interac and OTT Pay both describe digital wallets as a key part of modern checkout, especially for younger and more mobile-heavy customers. For Gen Z and many millennials, pulling out a phone feels more natural than reaching for a physical card. Meeting that expectation can tilt a borderline sale in your favour.

2. Faster lines and smoother workflows

Every tap that replaces a chip insert or cash exchange reduces friction. Staff can focus more on greeting and service and less on handling cash or managing receipts. OTT’s article highlights that staff often gain time for engagement once payment friction drops.

3. Perceived security and lower fraud

Tokenization and strong authentication give digital wallets a strong security profile. Interac states that digital wallet transactions with Interac Debit can offer merchants low fraud risk and no chargebacks on certain online use cases. Card brands still have chargeback mechanisms, yet the mix of encryption, tokens and device checks reduces some common fraud patterns.

4. Branding and marketing hooks

Supporting digital wallets lets you show Apple Pay / Google Pay badges on your door, website and receipts. For e-commerce, that signals professionalism and modern infrastructure, which can improve trust for new visitors who do not know your brand yet.

5. Better fit with subscription and app-based models

If you later add a mobile app, loyalty program or subscription, digital wallets integrate easily. Customers can save recurring payment methods in ways that feel nearly invisible once set up.

Trade-offs and real costs

It would be easy to stop at the upside, though that would feel incomplete. Canadian SMBs have real concerns around fees and complexity.

1. Fees and pricing structure

Digital wallet transactions usually ride on existing card rails. For in-person Apple Pay or Google Pay, fees match contactless card-present rates in most setups. For in-app and online wallets, rates align with card-not-present pricing.

Key points to ask your provider:

• Are digital wallet transactions priced the same as your current contactless card taps?
• Any extra scheme or network fees specific to wallets?
• Different rates for in-store versus in-app / online wallet payments?

Some processors build all of this into a flat blended fee. Others itemize more. Clarity matters here, since digital wallets can shift more volume into certain pricing buckets.

2. Hardware and integration

Most Canadian payment terminals shipped in recent years already support contactless and, by extension, digital wallets. Payments Canada and Vitality Cash’s payment trends article both describe wide tap adoption across merchants.

Yet some older POS units still lack proper NFC capability or need software updates. For e-commerce, you might need to:

• Update your payment gateway
• Add wallet buttons at checkout
• Adjust fraud tools to account for tokenized payments

The effort level ranges from “almost nothing” to “a small project”, depending on your starting point.

3. Staff training and process tweaks

Staff need to recognize:

• How to prompt a wallet payment on the terminal
• What to do if a phone fails to tap
• How to handle refunds for wallet transactions

Training is usually simple, though skipping it creates awkward moments at the counter.

4. Data visibility and reconciliation

Digital wallets still show up in your processor reports, yet line items may look slightly different. Tokens and alternate identifiers appear instead of full card details. For many owners this is fine. For those who run detailed internal analytics, slight changes in how data appears can require small adjustments in reporting or mapping.

This is where good cash flow and accounting tools help.

Where Vitality Cash fits in: from payments to cash flow

Digital wallets change the timing and mix of your inflows. Cash shrinks, cards and wallet-driven card transactions grow, Interac e-Transfers and other account-based methods sit nearby. Without a clear overview, it becomes hard to see how this mix affects cash flow and planning.

Vitality Cash focuses on AI-driven cash flow management for Canadian SMBs. The platform connects to your financial data, tracks income and expense, and projects cash balances forward using historical patterns.

In the context of digital wallets, that brings a few practical advantages:

1. Payment mix insight: The tool helps you see how much revenue flows through cards, digital wallets, Interac, e-Transfers and other methods over time. That allows you to compare fees, settlement timing and chargeback exposure by method.
2. Impact on working capital: Some payment methods pay out faster than others. If digital wallet use rises and those transactions settle more quickly or more slowly than your current mix, the forecast in Vitality Cash will reflect that shift. You get a clear picture of how new payment choices influence day-to-day liquidity.
3. Planning for new channels: If you start accepting Apple Pay and Google Pay for online orders or app purchases, the system logs that new inflow pattern. Using AI-driven forecasts, Vitality Cash can show whether these channels reduce cash gaps or add new peaks and troughs in your cycle.
4. Better conversations with providers: With firm numbers on settlement speed, fee cost and refund behaviour, you sit in a stronger position when you negotiate with processors or banks. You no longer rely on rough impressions; you have a clear view of how digital wallets affect your actual cash.

In simple terms, digital wallets live on the revenue side, Vitality Cash watches both inflows and outflows and helps you decide which mix of methods supports steady cash rather than stress.

A practical checklist: should your Canadian SMB offer digital wallets?

Every business is a little different. This short checklist gives a structured way to think through the decision.

1. Look at your customers

Ask yourself:

• Do a meaningful share of your customers hold their phones near the terminal out of habit?
• Do younger customers ask about Apple Pay or Google Pay?
• Do you serve tourists, commuters or office workers who tend to carry phones more than wallets?

If the honest answer feels like “yes” or “probably yes” to several, digital wallets deserve serious attention.

2. Look at your average ticket size and flow

Digital wallets fit particularly well where:

• Many small or mid-sized purchases happen in a day, such as cafés, quick-serve restaurants, salons, convenience stores, transit-linked shops
• Customers buy on mobile or tablet devices in e-commerce

Higher ticket businesses can gain too, especially with online checkouts; fewer failed payments and fewer abandoned carts help a lot when each order matters.

3. Check your current setup

Talk to your payment provider and ask:

• Does my current terminal fully support digital wallets for tap?
• Are Apple Pay and Google Pay already active, or do you need to switch something on?
• Are there any new fees for these methods?

For online stores:

• Does your checkout page show digital wallet buttons?
• Is the user path clear on mobile screens?

Many Canadian gateways now treat wallet activation as a simple configuration step.

4. Map the effect on your cash flow

Use an internal spreadsheet or a tool like Vitality Cash to ask:

• If digital wallet usage reaches 20–30 percent of my card volume, how does that change fees in a typical month?
• Do settlements arrive on the same schedule, or do some methods settle faster or slower?
• Do chargebacks follow a different pattern for wallet transactions?

Vitality Cash can pull these inflows directly from your accounts and show projected balances under different scenarios, so you do not have to guess based only on processor marketing material.

Comparison table: card-only setup vs card plus digital wallets

Here is a compact view of how adding digital wallets tends to change your payments picture.

This table paints in broad strokes, yet it matches findings from Interac, PayDo, Moneris and other payment specialists who track digital wallet adoption and its effect on merchants.

Key takeaways for Canadian SMB owners

To wrap this up in a way that helps you act, here are the main points to hold on to:

• Digital wallets such as Apple Pay and Google Pay sit on top of existing card networks and bring faster, more convenient checkout flows for both in-person and online payments.
• Cash use in Canada keeps shrinking and digital payments dominate, with strong growth in contactless and mobile-driven methods, even though Canada still trails some markets in virtual wallet usage.
• For many SMBs, offering digital wallets improves customer experience, increases conversion rates on mobile and helps meet expectations of younger and international customers.
• Trade-offs mainly centre on fee structure, small hardware or integration projects and the need for clear staff training, rather than on large structural risk.
• Cash flow impact from digital wallets depends on settlement timing and fee mix. Using a tool like Vitality Cash to track and forecast these changes gives you a more accurate picture and helps you decide how far and how fast to push wallet adoption.

So, should Canadian SMBs offer digital wallets such as Apple Pay and Google Pay?

For many, the honest answer leans toward “yes, or at least very soon,” especially in retail, hospitality and online sales. The clearer you see your customers’ habits and your own cash flow data, the easier that decision becomes. Digital wallets then move from being a trendy extra to a practical piece of how money flows through your business, watched and guided by tools that keep the bigger financial picture in view.