Cash On The Decline: Credit Card Use Skyrockets As Cash Plummets In Canada
The shift from tangible to digital dominates Canada’s financial landscape, as revealed in the latest study by Payments Canada. Over the last five years, credit card use surged by 30%, contrasting starkly with a 41% decline in cash use. Notably, even though the total payment volume dipped by 2% compared to half a decade ago, the value of these transactions amplified by a significant 21%.
The data from 2022 is a testament to this evolving trend. Credit cards accounted for 33% of the payment volume, followed closely by debit cards at 31%. Electronic funds transfer made up 15%, while cash represented just 10%. Surprisingly, online transfer payments have now outpaced personal electronic funds transfer in volume, indicating a rising reliance on real-time digital transactions.
Diving deeper into the digital realm, a record 1.06 billion e-transfers were dispatched in 2022, marking an 11% rise from the previous year. Meanwhile, the buy now, pay later (BNPL) system witnessed almost half of its current users (48%) ramping up their usage during the same period.
Cryptocurrencies, the digital gold of this era, also had an interesting reveal. While nearly half of Canadians (49%) are familiar with them, a mere 14% have ventured into using these, primarily as an investment avenue rather than a transactional medium.
With cash use sliding back to pre-pandemic levels, 1 in 10 transactions in 2022 was made in cash. This suggests that while digital transactions gain traction, there’s still a significant segment relying on physical currency. This is further backed by the fact that almost 9 in 10 Canadians still use a payment card for in-store purchases monthly.
However, the five-year trend holds a revelation: online transfers, despite being a sliver of the total payment volume, have skyrocketed with a 328% growth in volume and a 314% jump in value. They stand poised to overshadow cash in the foreseeable future.
Evidently, Canada is steering towards a more integrated digital payment structure. While many predict a cashless retail environment in the coming decade, the traditional allure of cash remains.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
