Assessing Canada’s Cash Access

ATM numbers increased by 3.7 percent across Canada between 2019 and 2022 and the average distance people need to travel to reach their nearest machine is two kilometres according to new research from the Bank of Canada.

The discussion paper—How Far Do Canadians Need to Travel to Access Cash?—opens by observing cash usage had rebounded by 2022 following a dip during the pandemic, accounting for around 20 percent of all purchases, thus playing ‘a significant role in the Canadian economy.’ 97 percent of small and medium-sized businesses accept cash payments, with many preferring it due to high transaction fees associated with card payments.

The Bank’s research shows access to cash has remained stable since 2019, with the increase in ATMs helping to offset a 5.2 percent decrease in banks and other financial institutions, driven primarily by branch closures in rural areas. Unsurprisingly, rural Canadians have less access to cash, needing to travel an average distance of four kilometres to their nearest ATM and 9.6 kilometres to the nearest branch, each twice the national average.

The paper suggests the fee structure surrounding ATMs in Canada may account for their increase, in contrast to many other developed economies, saying ‘while these fees might, at first glance, appear to be detrimental to the consumer… [they] could benefit because the larger number of more sophisticated [ATMs] incentivised by the fee structure improves convenience and reduces the cost of travelling to access cash.’

Comparable data from the UK’s Financial Conduct Authority found 95.7 percent Brits live within two kilometres of a facility offering cash withdrawals, versus 90 percent of Canadians living within five kilometres. In the UK, the withdrawals are without charge, versus the surcharge and interchange fees levied in Canada. However, with the UK covering just 243,610 square kilometres compared to Canada’s 9.98 million square kilometres, the relative number of services required are on completely different scales. The Bank of Canada paper also notes in its conclusion that it only assesses access to cash from people’s homes, whereas in reality some people can access it more readily from another location they regularly frequent, such as a workplace, a store they shop at or a restaurant they visit often.