- Experts say we could see completely cashless societies within the next five years.
- Canada has the highest credit card usage and contactless payment limit in the world.
- Going cashless has its downsides, particularly for vulnerable members of society.
Coins and banknotes may soon be a thing of the past as more Canadians choose to go cashless in favour of contactless payment options like credit cards and mobile wallets — a trend accelerated by the COVID-19 pandemic.
Thankfully, Canada supports the technology and infrastructure to allow people across the country to adapt. As a result, a recent money.co.uk study recognized Canada for having the most cashless economy in the world as of May 2021.
The report ranked each country using a score based on contactless payment limits, the number of major e-wallet operators available, the number of automated teller machines (ATMs) per 100,000 adults, and the percentage of those aged 15-plus with debit and/or credit cards.
Canada topped the chart with a score of 79.1 out of 100, which may come as a surprise to some. However, an estimated 83% of the population own a credit card in Canada — the highest usage in the world. Not only that, but Canadian cardholders can also access the highest contactless payment limit at C$250, more than any other country.
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Nevertheless, the race to become the first completely cashless society is still a close one. Hong Kong is trailing behind Canada by a narrow 2.3 points, landing the country second; Singapore ranks third by just 0.6 points. Notably, the United States does not appear in the top 10 countries despite being one of the wealthiest nations.
| Country | Score out of 100 |
|---|---|
| 1. Canada | 79.1 |
| 2. Hong Kong | 76.8 |
| 3. Singapore | 76.2 |
| 4. New Zealand | 75.0 |
| 5. Japan | 74.1 |
| 6. Australia | 72.3 |
| 7. Norway | 72.2 |
| 8. United Arab Emirates | 72.1 |
| 9. Switzerland | 70.9 |
| 10. Finland | 70.0 |
The survey suggests we could see completely cashless societies within the next five years, though it may be hard to get everyone on board with the idea.
The pros and cons of going cash-free
While electronic payments can have advantages like reducing fraud and money laundering, digital transactions also have downsides. money.co.uk lists potential pros and cons to ditching the banknote.
Pros:
- Digital records can reduce fraud and criminal activities.
- Contactless payments are convenient for everyday purchases and travelling abroad.
- Forgoing cash can save time and resources, reducing transportation, handling procedures and storage of money.
Cons:
- Vulnerable people and those unfamiliar with technology may be without payment options.
- Glitches and outages can cause issues when people are too reliant on technology.
- Cyberattacks pose a threat in the electronic world; no one is safe from fraud online.
- Cashless payments have an ease of use that can lead to overspending and mismanagement of finances.
With the invention of cryptocurrency, non-fungible tokens (NFTs) and other digital assets, there is no telling where electronic payments will lead. As of now, cashless societies seem like the way forward, but only time will tell how and when countries will meet this historic milestone.
