Going Cashless In Canada
Canadians are fast becoming the most digitally attuned citizens globally, enthusiastically embracing and adopting new technologies that make life easier and more accessible. These days, Canadians are making fewer cash transactions than ever before. Even for the smallest purchases, contactless payments are becoming the norm, a trend that has accelerated in light of recent global events.
Let the numbers do the talking
As reported by Visa, recent statistics show that 83 percent of Canadians have a smartphone, which they use to pay for items in-store, shop online, and do their banking.
In fact, they are so connected to their phones that 77 percent of them would never leave home without it. With this kind of convenience and dependency, it’s not surprising that Canadians are embracing their phones as payment devices. Canada has one of the highest penetration of card-based payments globally – more than 70 percent of personal purchases in Canada are card-based. Contactless payments (both mobile and card-based) are widely accepted in Canada – in fact, there are currently 27 Visa payWave transactions happening every second in Canada. A full 25 percent of retail ecommerce transactions are now being made on mobile devices.
In a survey conducted by ForexBonuses, Canada was the top cashless country in the world. The major reason being that the country had more than two credit cards per person, and 57 percent of payments were cashless.
Any society heading towards a cashless economy has numerous benefits for both consumers and businesses. Visa’s Cashless Cities Report pointed out that businesses that switch from cash to electronic payments can increase revenue and reduce manpower hours. While for consumers, cashless shopping is highly convenient. 7 out of 10 Canadian smartphone payment users cited convenience as the main driver for paying with their phone, versus traditional payment methods. Cashless payments offer security and speed that consumers value.
At present, the idea that only big-ticket items are worth paying for on a card is considered archaic. Whether paying bills or making everyday purchases of coffee, food, clothing, or gasoline - using debit cards, credit cards, “tap-and-pay” options, smartphone apps, and other cashless technology is growing in popularity across Canada.
Much of this success can be attributed to our early adoption of EMV Chip & PIN, Contactless Payments like PayPass Tap & Go™, Visa Paywave, and many modern digital payment methods, including electronic funds transfer and NFC.
The Decline of Cash in Canada
The main fuel behind the growth of Canada's cashless economy is the presence of credit and, debit cards, contactless payments, electronic transfers, and phone apps, along with a number of alternatives to the consumers for counting bills and hauling change.
According to the Bank of Canada, a total of about 2.5 billion banknotes were circulated towards the completion of 2019, with a value of more than $93 billion. It may sound huge, but Canadians have been going cashless for years now, so the number of banknotes in circulation is at a low point compared to historical trends..
A survey published by Angus Reid Institute in partnership with The Globe and Mail found that 63 percent of 1,500 respondents agreed either strongly or moderately that they hardly ever carry cash. The number was exceptionally high among the younger set: 70 percent of respondents between 26 and 37 were cash averse. But, remarkably, 57 percent of Canadians over the age of 55 also said they hardly ever carry cash.
Stacey Madge, president and country manager for Visa Canada declared that Canada is a very low cash-usage country. Of about a trillion dollars in personal consumption expenditures, less than five percent of that is cash.
Even the reports published by the Bank of Canada in their 2019 Cash Alternative Survey Results, highlighted that the use of cash at the point of sale1 (POS) has been declining in favor of digital payment methods, such as debit and credit cards. And in the same year, they found that about one in 10 respondents said they were entirely cashless.
Canada is Going Cashless
Cash is an ingrained part of our human existence. But in these pandemic times, paper money has acquired taboo status. Numerous Canadian retailers have been demanding that customers pay with cards, if possible, to restrict contact. Many places have even stopped accepting banknotes altogether during the pandemic. As people are forced to self-isolate or distance themselves from all forms of public gathering, they are looking to avoid bank branches, and cashless transactions serve as a viable option.
In H1 2020 Canada's Automated Clearing Settlement System (ACSS) which handles a large volume of payments in the country, said that a record 89 percent of those payments were electronic. It offers added security and safety of the financial transactions done by the citizens. With all of the tools and facilities available, it is no wonder that Canada has made such a push in this direction.