Canadian Consumers Do Not Pay In Cash Essay

The Majority of Canadian Consumers Still Pay in Cash

Society has this common idea that the majority of transactions are done with plastic—either debit or credit—but this is incorrect. According to a report from the Bank of Canada, more than half of the transactions Canadians make are conducted with cash.

For larger or more expensive purchases, transactions are usually conducted with credit or debit cards, but 51 percent of transactions are done in cash. Only 31 percent are completed with debit and 19 percent are completed with credit cards. The fact that the majority of transactions are done in cash is a huge benefit to businesses, and it’s a trend they hope to see continue.

The Benefit of Cash

There’s a benefit to businesses when consumers pay in cash rather than with debit or credit. It comes down to transaction fees. For every transaction that’s completed with a credit card or a debit card, the merchant pays a fee to the credit card company. For each credit card transaction, the merchant pays an average of $2.08. The transaction cost for debit cards, in comparison, is 30 cents. For cash, the cost is 29 cents. It’s beneficial to merchants if consumers pay in cash because it doesn’t cost them nearly as much money in transaction fees.

While the use of credit cards is growing with consumers, the majority still prefer cash because they don’t have to worry about hidden fees and interest rates when they fail to pay their credit card balances. Cash is also more convenient, widely accepted, and quick. It also doesn’t leave a paper trail—a benefit to many