Even in the next five years, a majority of Canadians are still likely to conduct their purchases through physical cash instead of electronic channels, according to a recent Bank of Canada staff discussion paper.
The value of cash as an easily deployable tool grew sharply when the COVID-19 pandemic took hold earlier this year, the BoC said.
“Cash in circulation in Canada grew sharply in March and April 2020, and the increase was large in both absolute dollars and percentages compared with historical experience,” the bank’s report said. “Canadians continued to have good access to cash, were generally (but not universally) able to use cash at merchants and increased their cash holdings somewhat during the pandemic.”
Around 74% of Canadians do not have any plans to go cashless in the next five years, the BoC found. And even among those who are already using non-cash methods of payment, more than 50% still have some cash on hand.
During the week ending July 10, approximately 38% of Canadians used cashless payment, while 36% used physical money.
Recent Statistics Canada figures indicated that household savings have reached a near-record high, spiking to 6.1% in the first quarter. This was 69.44% larger than the Q4 2019 level and 165% higher annually, with growth having been consistent since 2018.
The last time this level was reached was back in 2001, real estate portal Better Dwelling said in its analysis.