In an era characterised by rapid technological advancements, it's no surprise that the ways we manage our finances have also undergone a significant transformation. The use of cash is becoming less prevalent in society, with about 84% of Canadians embracing digital forms of payment instead. However, while this transition offers convenience for some, it also presents select challenges for others.

This is exactly what one team of McGill University Masters in Public Policy students set out to investigate. Tasked by the Bank of Canada (BoC) to explore the social policy implications of a "Less-Cash" society, here’s what the students, Aftab Ahmed, Hayley Krieger, Sokhema Sreang, and Megan Warsame, found out.

The movement towards less-cash has consequences

Many Canadians now favour different methods for their transactions, such as e-Transfer, PayPal, or using credit and debit cards. In fact, “cash use for daily purchases has declined from 54 percent in 2009 to 22 percent in 2021.” Because of this digital preference, cash has become more scarce for those that rely on it.

The students identified four separate cash-dependent groups who face undesirable outcomes in this new less-cash society: Indigenous Peoples, unhoused individuals, older people, and survivors of domestic abuse. Individuals belonging to these demographics may face increased risks of financial exclusion, abuse, and exploitation as a result of this transition.

Financial abuse and fraud can be especially prevalent for older adults. In 2022, there were over 90,000 reports of fraud to the Canadian Anti-Fraud Centre (CAFC), with approximately $530 million lost as a result. CAFC has also found that seniors tend to lose 33% more money on average.

There are many more reasons that people prefer traditional cash-based transactions; including, but not limited to, the following:

  • For low volume transactions.
  • To safeguard finances in times of crisis: “Many individuals express a preference for keeping their savings or emergency funds in cash, citing reasons such as: security, universality, accessibility, anonymity, and the sense of control they derive from managing their finances in physical currency.”
    • Cash can also be hard to come by in times of emergency when demand increases, e.g. the major network outage Rogers experienced in 2022.
  • For better budgeting: “For vulnerable groups, cash-based budgeting is reliable, easy to monitor, and prevents individuals from going into debt from an over-reliance on credit.”
  • As a method of payment for various social events and traditional occasions.
  • For those reliant on panhandling to fund necessities.
  • As a “getaway fund” for those experiencing domestic abuse.

Reliance on cash can also be the result of a lack of trust for financial institutions or limited access to banks. Those without access to mainstream financial services may instead turn to “fringe banks,” such as cheque-cashing outlets, payday lenders, or pawnshops, which can result in further exploitation.

So, whether intentional or not, less cash use means less cash acceptance—and that can lead to financial exclusion.

Despite very few Canadians intending to go fully cashless anytime soon, it seems that that’s where we’re headed. For example, it’s been predicted that “26 percent of Canadian grocery stores could reject cash transactions within the next five years.”

Without any interventions in place to prevent it, Canada seems to be headed “towards an inequitable payments landscape.”

There is a way forward - Recommendations:

With these consequences in mind, the McGill students made three recommendations to the BoC.

  1. Strategic Review to Define Economic and Financial Welfare (EFW). EFW is a “measure of an economy's health, capturing aspects like sustained growth, stability, equitable wealth distribution, and financial inclusion, amongst other elements.” As stands, it does not explicitly factor in financial exclusion. This recommendation entails defining EFW based on five interdependent parameters: financial stability, economic stability, monetary stability, sustainable economic growth, and financial inclusion.
  2. Community Cash Connect Program. This recommendation entails implementing a program which would provide no-cost ATMs where needed to improve access for vulnerable communities.
  3. Voluntary Codes of Conduct for Vulnerable Groups. This recommendation entails that the banking industry enact certain codes which would “promote ethical practices, prioritise customer protection, and ensure fair and transparent access to basic financial tools and services.” These codes would build on existing commitments in order to better address the precise needs of vulnerable groups and build trust.
  4. Cash Access Committee. This recommendation entails the BoC appointing a committee of experts “to investigate the need for the legislative protection of cash in Canada.” This would provide the tools to respond to this issue on a larger scale.

By addressing the unique needs of these marginalised groups and heeding these recommendations, only then will Canada avoid sleepwalking towards an inequitable future.

Click on the links to read the executive summary and full report.


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