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Study predicts 70 percent drop in cash transactions in Canada

September 23, 2016

By 2030, cash purchases will make up only 10 percent of money spent in Canada, compared with 35 percent of transactions in 2014, according to a study by Canadian credit and debit card processor Moneris Solutions Corp.

This 70 percent decline will coincide with an increase in the use of digital payment technologies, especially among younger Canadians, a press release from Moneris said. Consumer misconceptions about the security of mobile wallets and the ability of mobile wallets to digitally store physical wallet contents, are among the factors slowing the transition.

Canadian consumers increasingly are turning to contactless technology to make faster and more convenient payments, Moneris said. The company found that tap-and-pay is preferred by:

• 67 percent of 18–34-year-olds;
• 56 percent of 35–44-year-olds;
• 48 percent of 55–64-year-olds; and
• 49 percent of those age 65 and older.

"More Canadians — especially younger ones — are tapping their cards to pay as opposed to inserting them into payment terminals," said Rob Cameron, chief product officer at Moneris. "We've seen the number of contactless transactions more than double this year, which is a strong indication that mobile payments are going to see a huge lift."

Other findings from the Moneris mobile wallet survey:

Younger Canadians are more likely to prefer mobile wallets. Preferences by age group were:

• 25.3 percent of 18–34-year-olds
• 23.5 percent of 35–44-year-olds;
• 18.3 percent of 45–54-year-olds;
• 10.4 percent of 55–64-year-olds; and
• 5.8 percent of those age 65 and older.

Canadians said they would be more likely to use a mobile wallet under the following circumstances:

• if I knew it was secure, 61.6 percent;
• more stores I shop at accepted it, 41.9 percent;
• if it were available for the kind of credit card I use, 39.8 percent;
• if it were available for the kind of phone I use, 37.8 percent; and
• more people I know were using it, 36.6 percent.

Credit cards are the most frequently used payment type. Percentages of Canadians who say they use the following payment types always or often:

• credit card, 59.7 percent;
• debit card, 55.9 percent;
• contactless card, 31.3 percent;
• mobile wallet, 2.5 percent;
• cash, 45.7 percent; and
• retailer mobile app (e.g., Starbucks), 4.8 percent.

The study, conducted by Leger, surveyed 1,516 Canadians April 25–28.