Tim Hortons is a Canadian fast food institution, beloved for its coffee and donuts. For many years, Tim Hortons stood apart from its competitors by only accepting cash payments – no credit or debit cards allowed. But in the 2010s, Tim Hortons finally started accepting major credit cards, catching up to its customers‘ preferred payment options.
Today, Tim Hortons takes Visa, Mastercard, American Express, Apple Pay, Google Pay, and most other common cashless payment methods. This article will dive into all the details of how you can pay at Tim Hortons with plastic or with your phone. We‘ll also explore why Tim Hortons resisted going cashless for so long, and how accepting credit cards and mobile payments benefits both customers and the business.
The Growth of Cashless Payments in Canada
Canadians have enthusiastically embraced cashless payments in recent years. According to Payments Canada, the COVID-19 pandemic accelerated the shift away from cash, with 62% of Canadians using less cash in 2020. Contactless payments, where consumers tap a card or phone to pay, grew by over 30% in Canada in 2020.
This trend is even more pronounced among younger Canadians. A 2021 survey by Visa found that 79% of Canadian Millennials and 79% of Gen Zs are willing to go completely cashless by 2022. By contrast, only 59% of Gen Xers and 49% of Boomers are ready to give up cash.
The most popular cashless payment methods in Canada are:
- Credit cards (78% of Canadians use regularly)
- Debit cards (75%)
- Mobile wallets like Apple Pay (54%)
- Bank account transfers (51%)
Fast food chains like Tim Hortons are adapting to these changing payment preferences out of necessity. A business that doesn‘t accept cards or mobile payments risks losing customers, especially among younger generations.
What Credit Cards Does Tim Hortons Accept?
Tim Hortons accepts all major credit cards, including:
- Visa credit cards
- Visa debit cards
- Mastercard credit cards
- Mastercard debit cards
- American Express cards
Some of the most popular rewards credit cards in Canada that can be used at Tim Hortons include:
- Scotiabank Scene+ Visa: Earn Scene+ points on every purchase
- TD First Class Travel Visa Infinite: Earn TD points on purchases to redeem for any travel
- BMO CashBack World Elite Mastercard: Up to 5% cash back on all purchases
- CIBC Dividend Visa Infinite Card: Earn cash back, including 4% at grocery stores and gas stations
- American Express Cobalt Card: Earn flexible Membership Rewards points on purchases
When a customer pays with a credit card, Tim Hortons pays an interchange fee to the card issuer. These fees typically range from 1-3% of the transaction amount. For a low-margin business like Tim Hortons, these fees can add up quickly.
To offset credit card fees, some Tim Hortons locations may slightly increase prices, or may encourage customers to pay with cash or debit instead. However, most major fast food chains simply view credit card fees as a cost of doing business in today‘s economy.
Visa and Mastercard Dominate Canadian Credit Card Market
Visa and Mastercard are by far the most widely held credit cards in Canada. According to the Canadian Bankers Association, there are over 76 million Visa and Mastercard credit cards in circulation in Canada. That represents over 90% of the Canadian credit card market.
Here is the breakdown of credit card market share in Canada:
| Card Brand | Market Share |
|---|---|
| Visa | 43.8% |
| Mastercard | 35.0% |
| American Express | 9.1% |
| Other | 12.1% |
With Visa and Mastercard making up nearly 80% of Canadian credit cards, it‘s easy to see why accepting these cards is a must for major retailers like Tim Hortons.
Interac debit cards are also extremely popular in Canada, with over 30 million active cards. The widespread adoption of Interac debit, which allows for easy tap payments, has helped fuel the growth of cashless transactions at fast food restaurants.
Mobile Payments Gain Popularity
In addition to plastic cards, Tim Hortons has also embraced mobile payment apps and digital wallets. Tim Hortons accepts the following mobile payment options:
- Apple Pay
- Google Pay
- Samsung Pay
Paying with a mobile wallet is often faster than paying with a physical card. Customers simply need to hold their phone or smartwatch near the payment terminal to complete the transaction. No PIN codes or signatures required.
The use of mobile wallets is growing rapidly in Canada. The Visa survey found that 44% of Canadians used a mobile wallet in 2021, up from 25% just a year earlier. Among Millennials, mobile wallet usage is even higher at 64%.
Other fast food competitors have also gone all-in on mobile payments:
- McDonald‘s accepts Apple Pay, Google Pay, and Samsung Pay at all locations
- Starbucks has its own mobile payment and loyalty app with over 31 million users
- A&W Canada takes Apple Pay and Google Pay both in-store and in-app
- Burger King Canada launched its own digital wallet in 2022
Tim Hortons Mobile App and Loyalty Program
To keep pace with competitors, Tim Hortons launched its own mobile app in 2017. The Tim Hortons app allows customers to:
- Order and pay ahead for pickup in-store or at the drive-thru
- Earn and redeem Tim Rewards points on purchases
- Customize and save favorite orders
- Send e-gifts and reload Tim Cards
- Access exclusive offers and discounts
The Tim Hortons app accepts credit cards, debit cards, Tim Cards, or Tim Hortons gift cards as payment. Over 10% of Tim Hortons transactions now occur through the app, and that number continues to grow.
Loyalty programs are also an important part of the mobile payment ecosystem. The Tim Rewards program offers 10 points per eligible transaction. Once customers earn 1,000 points, they can redeem them for a free coffee, tea, or baked good.
How does Tim Rewards compare to other fast food loyalty programs? Here‘s a quick overview:
| Restaurant | Loyalty Program | Earn Rate | Key Rewards |
|---|---|---|---|
| Tim Hortons | Tim Rewards | 10 points per purchase | Free coffee, tea, baked goods |
| Starbucks | Starbucks Rewards | 2 Stars per $1 | Free drinks, food, merch |
| McDonald‘s | McDonald‘s Rewards | 100 points per $1 | Free menu items |
| Burger King | Royal Perks | 10 Crowns per $1 | Free Whopper after 250 Crowns |
While each program is structured differently, they all incentivize customers to pay through the mobile app to earn rewards. This boosts loyalty and gives the restaurants valuable data on customer habits.
Benefits of Credit Card Payments for Tim Hortons
Accepting credit cards is a win-win for Tim Hortons and its customers, even with the associated processing fees. Here are some key benefits for the business:
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Increased sales: Numerous studies have shown that people tend to spend more when paying with credit versus cash. One MIT study found that McDonald‘s customers spent 56% more when using credit cards. For low-ticket retailers like Tim Hortons, even a small increase in average order size can significantly impact revenue.
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Improved speed of service: Tapping to pay with a credit card or mobile wallet is much faster than paying with cash, especially when change is involved. Visa reports contactless payments are up to 53% faster than cash payments. In the drive-thru, those seconds add up to get customers on their way more quickly.
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Better customer data: When customers pay with a credit card, Tim Hortons can collect data on purchasing behavior that isn‘t possible with anonymous cash transactions. This data can be used (in aggregate) to understand sales trends, optimize menu offerings, and create targeted marketing campaigns.
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Competitive necessity: Today‘s consumers expect to pay with credit cards everywhere they shop, including fast food restaurants. According to a 2022 report by TD Bank, 23% of consumers said they would stop shopping at a retailer that doesn‘t take cards. Tim Hortons can‘t afford to lose these customers to competitors.
The Future of Payments at Tim Hortons
As payment technologies continue to evolve, Tim Hortons will need to stay nimble to keep up with customer preferences. Some potential future payment methods that Tim Hortons could explore include:
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Cryptocurrency: Major retailers like Whole Foods, Home Depot, and Starbucks now accept Bitcoin and other cryptocurrencies through third-party apps. While still a niche payment method, crypto could gain steam in the coming years.
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QR code payments: Popular in Asia, QR code payments allow customers to scan a code with their smartphone to pay. This technology is just starting to gain traction in North America.
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Biometric payments: Imagine paying with your fingerprint or even your face. Biometric authentication is already used by some mobile wallets and could expand to in-store payments.
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Wearable payments: Contactless payments are expanding beyond smartphones to wearable devices like smartwatches, rings, and even clothing. Tim Hortons would need to upgrade its payment terminals to accept these new form factors.
Regardless of what the future holds, one thing is clear: cash is no longer king. Tim Hortons‘ embrace of credit cards, debit cards, and mobile payments has helped it stay relevant in a rapidly changing payment landscape. As long as the company continues to prioritize fast, secure, and convenient payment options, it will be well-positioned to keep Canada running on Timbits and double-doubles.
