In the year 2021, cash isn’t exactly extinct. We’re also not of the mind that it will ultimately disappear completely. After all, it is still reasonable to place coins or bills under a child’s pillow when he/she loses a tooth and leaves it for the tooth fairy. But just how viable is cash in the business world?
For many years, Canadians have been proving that they’re leaning towards living in a cashless society. Between credit cards and debit cards, there are far too many conveniences that make them go-to payment methods of choice. Firstly, lost or stolen cards can be replaced. Lost or stolen cash is gone for good. Secondly, there are numerous perks, such as rewards points, that come with credit card use. Cash provides you with only what you buy – there are no bonuses.
Canadians are shifting away from cash.
According to a 2017 study conducted by the Bank of Canada, the number of cash transactions in our country is steadily declining. Their website reveals that “cash is now used in one transaction out of three, or 15% of the total value of goods and services purchased.” The Bank of Canada doesn’t necessarily conclude that Canadians are giving up on cash. Their site notes that it is still preferred for small transactions like those for cups of coffee.
When it comes to larger purchases, however, credit cards are often the way to go. “Credit cards are an increasingly common payment method—they now make up 39 percent of retail transactions and 56 percent of the total value of goods and services purchased,” reports the Bank of Canada, “They are especially popular for transactions above $15.”
Canadians prefer credit cards, but love their debit cards too.
The Bank of Canada study found that debit cards did not take the top spot for any type of good or service. Nevertheless, they are still very popular methods of payment. The ever-popular Interac card allows Canadians to make purchases by having money automatically withdrawn from their bank accounts. Unlike credit cards, debit cards enable you to make purchases using money you actually have.
On BNNBloomberg.ca, Nicole Gibillini reveals the findings of a 2018 study conducted by research firm, Leger on behalf of mobile payments company, Square. It polled 1,566 Canadians and conducted phone interviews with 316 Canadian small businesses.
“The results revealed 79 per cent of Canadians prefer paying with a debit or credit card before using cash,” reveals Gibillini, “More than two-thirds of respondents said they’d be more likely to make a purchase from a small business if cards were accepted. However, only 11 per cent of small business owners said they believe cards are their customers’ preferred payment method.”
Do you accept credit cards and debit cards in your store?
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