A quarter of Canadian stores won’t accept cash in five years, report suggests
Cash was an early casualty of the pandemic. Wrapped up in fear of contagion with buffets and free food samples , experts recommended avoiding it. Contactless payments such as credit and debit cards, and digital wallets quickly became the norm instead. Some businesses even enacted a no-cash policy (which, contrary to popular belief, is within their purview).
Now, though, with the benefit of research, we know that the risk of COVID-19 transmission through cash is unlikely. Other pandemic habits, including unnecessarily giving groceries a bath, have faded into the background, but contactless digital payment at the grocery store is still going strong, a new study from the Agri-food Analytics Lab (AAL) at Dalhousie University suggests.
More than 90 per cent of Canadians use some kind of electronic payment to buy their groceries; credit and debit cards are the most popular. Convenience may be edging out cash at checkout, the report found, but most people are concerned about privacy, and how cashless grocery stores could affect the millions of Canadians who are unbanked or underbanked.
Fifty-three per cent of Canadians see a cashless economy as a privacy threat, and several recent incidents show just how real this threat is. A cybersecurity “event” in November 2022 will cost Sobeys $25 million, parent company Empire Co. Ltd. said in a report. Empire is still investigating whether customer information was compromised. Meanwhile, Maple Leaf Foods was hit by a ransomware attack that same month, and experts say that cybercrime is only getting worse.
Issues with privacy also include retailers’ unauthorized use of personal information. In the wider retail industry, an investigation by privacy commissioner Philippe Dufresne found that Home Depot gave Meta details including email addresses and in-store purchase information without customers’ knowledge or consent.
“People are starting to think differently about the cashless economy: Maybe, we’re a little bit more vulnerable than we think,” says Sylvain Charlebois, director of the AAL.
Going cashless comes at a trade-off. Cash offers anonymity; contactless transactions provide “precious data” to grocers. As with other technologies, we’re balancing privacy with convenience of use, says Jenna Jacobson, associate professor at Toronto Metropolitan University’s Ted Rogers School of Retail Management , who was not involved in the study.
“For many people, credit cards, debit cards are widely used. This isn’t a new technology by any stretch. And so, many people have a certain level of acceptance that in order to live in a modern society, we are constantly trading our private information for the benefits that the technology can provide. The convenience of not walking around with cash. The benefit of perhaps collecting points on your credit card. The benefit of something being tracked so you can do a return more easily.”
The shift to contactless payment methods picked up speed during the pandemic because it was considered a public health issue, Charlebois says. People got used to the convenience and self-checkouts became more common, many of them only accepting digital forms of payment.
The report suggests that 26 per cent of Canadian grocery stores won’t accept cash in five years. And you don’t have to look very far to see what the cashless future looks like — it’s already here. Cashierless, cashless, 24-hour grocery store Aisle 24 , for example, has locations throughout Ontario and Quebec.
“A lot of people are actually seeing the end of the runway here when it comes to cash,” says Charlebois.
Janet Music, AAL research program coordinator, adds: “I think there needs to be a bit more accountability so that people can now feel comfortable, because we’re going to be in a crunch. On the one hand, you won’t be able to use cash and on the other hand, you’re opening yourself up to a privacy risk.”
The report shows that Canadians are also concerned about how cashless grocery stores could affect access. Nearly three in four consider them discriminatory towards people who are unbanked or underbanked.
An estimated six per cent of Canadian households (1.5 million) were unbanked in 2022, according to the Financial Consumer Agency of Canada. Fifteen per cent were underbanked; households with a bank account relying on alternative financial services such as payday loans.
The report shows that an average of six per cent of Canadians pay for their groceries exclusively with cash, with the highest percentages reported in Manitoba (13 per cent) and Atlantic Canada (11 per cent).
Grocery stores are fundamental to our day-to-day lives, says Jacobson. An increasingly cashless society means some people will be left out. “Everybody needs food. So, while some boutique coffee shops, let’s say, can make the decision to say, ‘we only accept a credit card or debit card,’ if a grocery store does that, well, there are going to be certain population types that are excluded from that type of interaction.”
With food prices continuing to rise, Music noted the report’s finding on the number of Canadians who use credit cards to pay for groceries. Credit outpaced debit in British Columbia (58 per cent), Quebec (53 per cent), Ontario (50 per cent) and Alberta (48 per cent) as the most popular payment method. “We know prices are inflated. But if you’re now going to be spending an interest rate on top of that because you don’t pay off your card every month, then you’re paying way too much for food.”