As we are amidst the largest shopping season of the year, I wanted to spend a few moments discussing an ever more increasingly asked question. Is Canada moving towards a cashless society? Its something I spoke about in a blog post from a few years ago. A big part of that question is whether people are comfortable with using, and making available, their personal and private financial information.
I know, for myself, that I rarely use cash except for small purchases. I am a big user of PayPal and debit cards. In fact, there have never been more ways to pay for something as there are now and the oldest way, cash, is on the decline especially in Canada.
Some experts are raising concerns about the risks of a cashless society. Canada is the top country in the world embracing cashless technology, but it’s not without risk. There are reasons to reconsider going completely cashless.
Cash works even when the systems are down, when the power goes out and people can still make payments using bank notes. Second, bank notes offer privacy for your transactions. You can use them without giving anyone your personal or your banking information. Using cash avoids the risk of being hacked or having your card compromised.
Cashless systems aren’t perfect
To save drivers time and to reduce traffic congestion, Highway 407 in Ontario has an online payment system using an online transponder to record when drivers enter and exit the highway system.
For users without a pass, the Province of Ontario mails the registered owner a bill. The complication is mailing bills to foreign addresses attached to license plates. They can’t access that information.
The Royal Canadian Legion also experimented with cashless fundraising efforts with their digital Remembrance Day poppy. It gave them an opportunity to reach a younger Canadian audience. In this day and age, most people aren’t walking around with wallets and change purses.
Canadians could purchase, personalize and post a digital poppy, while still contributing money to veterans. An opportunity they might not have had if they were limited to putting cash into a box.
Future of digital payments
Should cash really go? Afterall, it is inconvenient. We are always having to go to a bank or an ATM to access cash. Not to mention the risk of our banking information being compromised through a hacked ATM.
Take another perspective. For instance, what about the possibility of introducing a digital currency, which would then be issued by the central bank. I, for one, hope that they actually will be going with it because I like the idea of a digital currency being issued alongside the mobile banking and the banking system. It’s a simple monetary value stored electronically that can be used to make payments.
Seniors and security
The problem is that we are there yet. There are some real legitimate concerns around going cashless.
Take a senior who has dementia and, for whom, dealing with a card is just too difficult. The only way she can spend money is with cash. Although this is a small part of the population, the percentage of seniors, as a percentage of the total population, is increasing. In Canada, there is currently under three percent of people actually insisting on using cash. But it’s not none.
Further, if we depend on electronic systems, we’re susceptible to hacks and power outages. That said, I still believe the benefits far outweigh the risks. This would put us in the best spot. I’d like cash to give way as a main form of currency because I think cash creates risk. Imagine how much you could save by not having to worry about people stealing money from others. Because if somebody steals your wallet, your money is gone.
I think there is little debate in which way we’re headed. A cashless society would not generally cause material system-wide problems. The advent of the cashless society is happening and continually being developed. I have not even mentioned crypto-currencies, which is a whole other discussion. In other words, we’re moving toward becoming completely cashless, whether we like it or not. Our advice is that we do what we need to do to safeguard our personal electronic and payment information. Embracing a cashless society is Keeping Life Current.