The end of cash will produce casualties
This appeared in the Winnipeg Free Press: Remember the joy of getting your allowance as a child, and how the jingling of a few coins made your pockets heavy with purchasing potential?
Coins and bills are destined to become more a memory and less a reality, thanks to a rapid shift to digital payments. In fact, tap-and-pay cards are becoming so dominant that some businesses now reject cash.
The fast-food chain Iq Food Co. has five locations in Toronto and Vancouver, none of which accept coins or bills. It’s the same at the two Mad Radish restaurants in Ottawa.
A recent Canadian Press story reported the rapid rise of tap-and-pay methods in Canada: 30.8 per cent of financial transactions in 2016, growing to 39.5 per cent in 2017 and expected to reach 50 per cent in 2018. The story included a prediction that, by 2030, cash purchases will comprise only 10 per cent of all money spent in Canada.
As we move toward an economy where 90 per cent of financial transactions won’t involve cash, the future of funds will unfurl with implications for our day-to-day lives. Digital transactions are faster, a relief to anyone who has been stuck in a grocery line behind a customer exploring the deep recesses of a pocket or purse.
Another advantage is that all digital transactions are recorded by our banks and card providers, a boon for our household record-keeping and at income tax time.
As another plus, the decline of hard currency will be a blow to the black market of service providers who dodge taxes by working for cash, no receipts given. It will be more dangerous to wink and ask for under-the table payment when money consists of digitally transferred funds that can be traced by Canada Revenue Agency auditors.
There are also drawbacks. It’s easier for thieves to capture and misuse our financial-card information than it is for them to steal cash from our carefully guarded wallets. Also, some institutions charge for use of debit and credit cards.
The move to a digital economy has implications. Yes, there are good reasons for moving away from cash, but try explaining them to the neighbourhood kid who set up a lemonade stand at the corner of your street.