A couple of decades ago a cashless economy seemed like a fantastic idea that only belonged in science fiction, but today it is a reality that exists in many countries and one that others, like Canada, are moving towards. If the trend continues, Canadian paper money may soon become rarities.
The journey away from cash started in the 19th century with the advent of the use of wire transfers, the only alternative to cash. This was predominantly used by large commercial entities and very wealthy individuals. Alternative payment methods such as credit and debit cards emerged on the commerce front during the twentieth century. Today payment options have evolved to include e-commerce virtual payment options such as PayPal and similar services.
With these new alternative payment methods, people around the world have been abandoning the use of cash. In fact, some countries today have advanced to the use of mobile phones or implanted chips to make payments. Sweden is a prime example because as of 2018, thousands of its citizens have been using microchips implanted into their arms to pay for goods and services. Other countries such as the Netherlands, Singapore, and France join Sweden in the category of least cash-reliant societies in the world. Countries such as Peru, Egypt, Malaysia, and Saudi Arabia are close behind with only 1% of transactions being cash related.
Canada’s Journey Toward a Cashless Economy
Despite the relatively slow pace, Canadians are just as involved in this journey away from cash as the remainder of the world. Payments Canada reported at the end of 2018 that, since 2012 cash payments had declined by 21%. In 2011 Canadians welcomed the mobile payment app, Apple Pay Canada. This was followed by the introduction of Google Pay Canada, Samsung Pay Canada and a host of other mobile payment apps for Canadians.
A January 2019 survey published by Angus Reid Institute in collaboration with The Globe and Mail revealed that Canadians are swiftly moving away from cash. The survey found that 63 % of the 150 respondents habitually avoided cash. The trend appeared to be more popular among younger Canadians but older Canadians (age 55 and up) were also swaying towards the non-cash lifestyle.
When it comes to Canada’s commercial entities, the trend is obvious. Many of them are forsaking cash in favour of options such as phone-based payment apps, credit and debit cards as well as electronic payment options. In fact, some branches of one Canadian bank (Canadian Imperial Bank of Commerce) no longer facilitate cash-based transactions.
What This Means For Canadian Physical Currency
But does this all mean that cash will disappear from the Canadian Commercial Scene Forever? Some experts dispute the theory that cash will disappear totally arguing that it meets needs that alternative options simply cannot handle. One such expert is University of Toronto professor and Retail Industry Guru, David Soberman who asserts that cash will always have a place in Canadian society while positing that the demand for cashless options is being driven by convenience and cost.
Without a doubt, cash still offers one obvious advantage- it is less traceable than alternative methods. For those who wish to remain undetectable by the grid, cash may remain the best option. Unfortunately, many traders are likely to shun cash in favour of the more convenient options as time progresses, leaving these obscurity seekers in the cold. The jury is still out on the fate of Canadian paper money but the current trend does indicate that, over time, Canadian currency (and other physical payment options around the world) will likely become very valuable as souvenirs reflecting the nation’s past.