COVID-19 Could Expedite Shift to Cashless Payment Methods in Canada
The number of cashless transactions is rising as the coronavirus pandemic limits the use of physical cash.
Digital payments, once born out of convenience, have become a necessity for some. While there might still be a number of people who hoard cash — as is often the case in times of crisis — others will cease to see the point if they are not able to use physical money to buy essential goods and services.
Data from payment organizations confirms the pandemic has accelerated Canadians growing disinclination to use cash, reads a new report from National Post. According to Interac, the number of debit contactless tap card transactions jumped four per cent since the beginning of the COVID–19 crisis, and the average amount spent rose 17 per cent. The volume of first-time Interac e-transfer payments since the end of March has soared, with a 62 per cent spike compared to the same period last year.
“This is going to be a big shock to the system that will push us in the direction of a more modernized payment system,” said Walid Hejazi, an associate professor of economic analysis and policy at the University of Toronto. “And if the developments we’ve seen during the pandemic continues to accelerate, we’re going to get to that fully modernized payment system much more quickly.”
Canada’s central bank warns that the decision to refuse cash, while completely legal, could be disastrous to some of society’s most vulnerable, including the homeless and others without bank accounts.
“There’s large groups within our society that will not have access to those digital platforms in the way that might be assumed,” said Hejazi. As such, the Bank of Canada last month urged retailers to continue allowing cash transactions in part for that reason.
As consumers become accustomed to using contactless payment methods, many in the post-COVID-19 world may realize that notes and coins have become as archaic as the paper tickets or tokens that transit agencies the world over have replaced in favour of electronic fare cards.