Canadians use cash for only 10% of consumer payments

...and that figure is falling

If Clint Eastwood were Canadian, Sergio Leone’s classic would have been called A Fistful of Plastic. A recent MasterCard Advisors white paper suggests that non-cash instruments account for 90% of payments in this country, among the highest rates in the world.

Canadian-Payments-by-Instrument

And the credit card companies are coming for that last wad of cash: The Global Journey from Cash to Cashless gives Canada a table-topping readiness score of 91, indicating macroeconomic factors pushing consumers away from physical money.

That doesn’t mean Canadians have stopped carrying notes and coins, however. Cash still accounts for over 40% of all transactions, but the small dollar-value of most purchases skews the value scale.

Of course, cashless payments aren’t restricted to credit cards, and the “other” section of the adjacent graph looks set to grow as more and more businesses and retailers add mobile-friendly payment options. Mobile wallets will take a good chunk of consumer transactions too.

Wireless cash isn’t just the preserve of the rich world—a quarter of Kenya’s GDP flows through mobile payment system M-Pesa, and David Wolman’s book The End of Money: Counterfeiters, Preachers, Techies, Dreamers—and the Coming Cashless Society argues it could make welfare more efficient:

“The more progressive line argues, as Wolman does, that reliance on cash transactions “perpetuates [poor] peoples’ exclusion from banking and the formal economy” and makes it hard for governments, especially in developing countries, to efficiently serve their citizens. Wolman cites a recent McKinsey study that found that if the Indian government could find a way to make all its payments to its citizens electronically, it could save more than US$22 billion a year—equivalent to 20% of the national deficit, or enough money to fund India’s major food aid program for two years.”

Nobody really mourned the death of the penny, and it seems that other forms of cash could be set to meet the same fate.

This story originally appeared in Canadian Business.

Consumer Articles

New Smarties box encourages consumer to count calories

New packaging allows consumers to parcel out the candies into healthier portions

Millennial employees aren’t really that different

Despite the stereotype, this cohort wants what their parents wanted

Google teams with AT&T, Verizon, T-Mobile on mobile wallet

Updated Wallet to be built-in to Android phones later this year

Retail sales dropped 2% in December: Statistics Canada

Largest drop in four years fueled by decline in gas prices and holiday spending

Sobeys’ campaign urges Canadians to eat their greens

Chef Jamie Oliver helps consumers find ways to incorporate veggies at mealtime

Ontario Toyota Dealers play matchmaker with millennials

New digital tool helps car buyers find a model that best fits their lifestyle

Canadian Tire removes snow, warms hearts

Social campaign encourages Canadians to lend a helping hand and "Shovel it Forward"