Credit cards get big boost as Canadians shun the ATM
Cash is no longer king for Canadians when it comes to paying for retail transactions.
A study released today by the Bank of Canada shows that less than half of our purchases are made in cash.
The number of cash transactions dipped from 53.5 per cent in 2009 to 43.9 per cent in 2013, the central bank found.
However the value of transactions made in cash remained almost unchanged – at 23 per cent of all the goods and services sold.
And even the small transactions once exclusively cash such as paying for parking, entertainment and food are increasingly done by credit cards.
The Bank of Canada says the rise of contactless credit and payment cards – cards with an embedded chip where consumers simply tap a reader to make a payment – is probably the reason why cash transactions are in decline.
The bank reviews methods of payment regularly to ensure it has enough polymer bills on hand for Canadians’ cash needs.
We’re shunning the ATM
Consumers over age 55 were more likely to use cash, but even they do less than half their spending with cash transactions.
As a result, the number of ATM transactions has fallen over that five-year period, the bank found. In 2009, Canadians went back to the ATM about 4.4 times a month, by 2013 it was 2.7 times.
Credit card use is on the rise, accounting for 31 per cent of transactions, an increase of 11 percentage points from five years ago.
Mobile payment systems are expected to make inroads over the next few years, but currently are quite a small share of retail payments, just 7 per cent. The big users are the 18–34 year olds, who pay by cellphone for 16 per cent of transactions.
The bank also asked Canadians how much cash they have in their wallet. The average? $84.
