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Cash is King in Canada, finds central bank report

Nov. 20, 2017 Share Source

A recent report from Canada's central bank reveals that cash is still an ever-popular means of payment in Canada, particularly for smaller purchases. However, the report also warns that digital options may replace cash in the near future.

But does this mean that the Canadian custom of carrying banknotes and coins around nearing its end? Maybe not...

The report, based on a 2015 survey and another from 2013, finds that cash payments made up the majority of transactions, while debit cards held the second greatest share at 31% and credit cards at 19%. Regardless, an overwhelming majority of businessess small (94%) and large (98%), continue to accept cash. 

'Given that most merchants accept several methods, it is mainly consumers who determine which they will use.'
" p. 14, Acceptance and Use of Payments at the Point of Sale in Canada (Autumn 2017) Bank of Canada

Excerpt from Bank of Canada report 

'We find that cash is still widely used, especially for small-value transactions, even at large businesses that accept cash and cards. Debit cards are used mainly for medium-value transactions and credit cards for large-value transactions...'

'...In the future, innovations in retail payments are likely to compete with and replace cash in these areas. Since the payments market is two-sided, consumers and merchants interact to determine the use of payment methods at the POS. This highlights the importance of studying both consumer use and merchant acceptance simultaneously.'

“As merchant acceptance of contactless payments increases, consumers may use their debit and credit cards more frequently, accelerating the decline in the use of cash,”
" p. 24, Acceptance and Use of Payments at the Point of Sale in Canada (Autumn 2017) Bank of Canada

Excerpt from Canadian Business article by Aleksandra Sagan

However, consumers seem to rely on physical money for the smallest purchases, with the median amount of a cash transaction valued at $8.04. Debit and credit card transactions are higher at $28.33 and $43.85 respectively. 

Most merchants seem to prefer cash and debit card payments, the report found, as they are less costly to accept than credit cards. Only two-thirds of small- and medium-sized businesses accept debit and credit cards, it said, while nearly all large businesses do...

Download Bank of Canada report here


Fung, Ben and Kim P. Huynh, Currency Department, Bank of Canada, and Anneke Kosse, Market Infrastructures Policy Department, the Nederlandsche Bank. Acceptance and Use of Payments at the Point of Sale in Canada. Bank of Canada Review • Autumn 2017. Accessed November 20, 2017. Web. 

Sagan, Aleksandra.  "Canadians pay most often in cash, but for small purchases, Bank of Canada says." Canadian Business. The Canadian Press. November 16, 2017. Accessed November 20, 2017. Web.

Last Updated: March 19, 2018

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