A recent Payments Canada article, published August 12, 2019, discusses the role of cash and finds that, despite the evolving payments landscape and increase of electronic payments, cash continues to be an important medium of exchange. The investigation also finds that the decline in cash use is slowing down thanks to heavy cash users who are not ready to give up reliable and resilient cash.
Recently, we have seen significant discussions in payments literature regarding countries moving towards becoming cashless societies. In Canada, electronic payment alternatives to the use of cash have flourished, in the form of credit and debit cards with merchants, a variety of electronic payment instruments options for conducting e-Commerce and the use of INTERAC e-Transfers for P2P payments. Despite the progress made with electronic payments, cash volumes remain relatively high in Canada.
“Almost a million Canadians don’t have a bank account, or a credit card, or a debit card, and so that’s problematic [...]. So, if you are to go cashless, 100 per cent you are excluding a segment of the population that has less means.”
Overall, the innovations in electronic payments are providing Canadians with easier, faster, and more efficient ways to pay. Although historical trends suggest that cash and paper-based payments are indeed declining, Canadians are still using the same traditional payment methods.
'Our market research suggests that cash is still prevalent and will continue to be an important medium of exchange unless some difficult challenges are addressed.'
The question remains - Is Canada moving towards a cashless society?
Our results suggest that cash and paper-based payments are still prevalent and will continue to be an important medium of exchange. Cash is easy to use and, more importantly, it is readily available and a convenient way to pay someone. For people who do not have a bank account, or don’t have a credit or a debit card, cash becomes their primary way of making payments.