Canadians report a love-hate relationship with cash, reveals new Payments Canada study

Key study findings:

• 31 per cent of Canadians use cash for day-to-day purchases.  
• 49 per cent believe Canadian stores will be completely cashless in the next 10 years.
• 52 per cent feel concerned about the prospect of cashless stores. 
• 26 per cent of Canadians feel the need to wash their hands after handling cash.
• Canadians are divided on embracing digital currency; 36 per cent find a digital dollar appealing, while 30 per cent do not.
• Key motivators to use cash include speed (38 per cent); widely accepted (38 per cent); ability to use own funds rather than borrow (25 per cent).
• 15 per cent of Canadians use cash to make ‘under the table’ payments.  
• One in 10 Canadians feel more ‘spend guilt’ using cash.

OTTAWA, November 14, 2023 – While cash use has significantly declined over the last six years from 2017-2022, with a 59 per cent decrease in the volume of cash payments and a 41 per cent decrease in the value of cash purchases, new research reveals that Canadians have no intention of ditching their physical wallets just yet.

Of the 87 per cent of Canadians that still use cash, nearly one in three (31 per cent) use cash for day-to-day purchases, such as making a small purchase, paying expenses, or paying a friend or family member. Nearly one in four (37 per cent) are using cash not only to make day-to-day payments but also hold on to it for emergencies. Older Canadians (55 years or older) are significantly more likely than other age groups to be using cash in this multi-purpose way. A further 32 per cent of Canadians report mainly holding on to cash in case of emergencies but have stopped using it for day-to-day payments.

“Cash has lost significant payment market share over the years as Canadians continue to turn to secure digital payment options for ease and convenience, coupled with an explosion in e-commerce, a trend that was further fueled through the pandemic,” said Jon Purther, Director of Research at Payments Canada. “Payment systems and infrastructure that we’re building today will serve as a platform for continued innovation. As we continue to see more payment innovations evolve, such as digital ID, buy now, pay later and open banking, there’s no doubt we’ll see further shifts in how Canadians choose to pay and get paid. But for now, Canadians value the use of cash, including holding it for emergency purposes.”

The majority of Canadians (55 per cent) say they have no desire to go cashless. Only 13 per cent report having gone completely cashless. Despite more than half of Canadians (55 per cent) who say they have no desire to go cashless, 49 per cent think it is likely that Canadian stores will go completely cashless in the next 10 years compared to 31 per cent who think it is unlikely. While cash is used less often for point-of-sale purchases, the prospect of cashless stores is a concern for 52 per cent of Canadians. This is primarily due to cash being seen as a reliable, widely accepted, safe and secure payment option that Canadians do not want to live without.

When it comes to how Canadians use cash, top uses include paying for low-value purchases $20 or less (70 per cent) and for tips, such as taxi, hotel or restaurant (55 per cent). Other top uses for cash include:

• Paying someone back for money they borrowed (38 per cent)
• Sending a cash gift (26 per cent)
• Charitable donation (19 per cent)
• Buying goods or services ‘under the table’ to avoid paying tax (15 per cent)
• Child allowance (14 per cent)

More than one in four Canadians (26 per cent) say they feel the need to wash or sanitize their hands after handling physical money. Nearly one in five (18 per cent) say they can’t help thinking about paper notes or coins being dirty or contaminated, with 17 per cent who try to avoid handling physical money out of concern for cleanliness.

When it comes to motivations for cash use, the top three factors include cash being fast (38 per cent), widely accepted (38 per cent), and providing the ability for Canadians to use their own funds rather than borrow (25 per cent). Additional key factors include:

• Easier to control/keep track of expenses (21 per cent)
• Anonymous (21 per cent)
• More convenient than other payment methods (20 per cent)
• Easier to budget spending (20 per cent)
• Cheaper than other payment methods (16 per cent)
• More secure than other payment methods (15 per cent)

While most Canadians are not ready to give cash up, the research reveals there are a number of key frustrations when making cash payments, including:

• Large denomination notes not being accepted (27 per cent)
• Not able to make online purchases (26 per cent)
• Challenges recovering lost or stolen cash (22 per cent)
• Less convenient than cards (16 per cent)
• There are fewer bank branches or ATMs nearby (12 per cent)
• Feeling more ‘spend guilt’ using cash versus cards or digital payments (10 per cent)

The research shows that Canadians have polarizing views on the appeal of a digital currency. When asked about the prospect of having a digital form of the Canadian dollar created by the Bank of Canada that could be used as a digital form of cash, more than a third (36 per cent) find a digital dollar appealing, while 30 per cent do not. One in four Canadians say they would not use a digital Canadian dollar, with 63 per cent who would still use cash if a digital Canadian dollar was introduced.

About the study  

The findings of this study are sourced from the Payments Behaviour Tracker - Consumer (Wave 2). The online study was conducted online between June 26 - July 7, 2023, among a nationally representative sample of 1,500 Canadians adults balanced and weighted on age, gender and region. For comparison purposes only, samples of this size would yield a margin of error of +/- 2.5 percentage points, 19 times out of 20.

About Payments Canada 

Payments Canada is a public purpose organization that owns and operates Canada's payment systems, Lynx and the Automated Clearing Settlement System (ACSS). Payments Canada is responsible for the physical infrastructure and the associated by-laws, rules and standards that support these systems. It also has a duty to promote the efficiency, safety and soundness of Canada's payment systems while taking into account the interests of end users. In 2022, Payments Canada's systems cleared and settled over $119 trillion—more than $476 billion every business day. Transactions that pass through these systems include debit card payments, pre-authorized debits, direct deposits, bill payments, wire payments and cheques initiated and received by Canadians and Canadian businesses. Payments Canada is working closely with the payment ecosystem to modernize Canada's payment systems to ensure Canada and Canadian businesses remain globally competitive.

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