When card payments, like debit and credit, came into play, many people predicted the extinction of cash. And when electronic payment options and digital wallets, like Apple Pay, Google Wallet, and Interac e-transfers came into existence, many were certain that the death of physical cash was only a matter of time. In fact, many were hopeful that it would finally die.
After all, no physical money would mean that businesses could eliminate the significant costs, risks, and time commitment associated with cash handling. Crime would also decrease, such as counterfeit fraud, physical crimes, and tax evasion.
Yet, cash remains a vital aspect of our day-to-day lives. We continue to value it and to prefer it as the top method of payment for many reasons, like the ones below.
1. It’s Universal
Many people consider mobile payment systems and electronic payment options to be “rich people” products. After all, you need a mobile phone or a computer as well as a bank account to engage in these types of transactions. And considering millions of people don’t even have bank accounts or are considered under banked, these types of electronic payment options just aren’t for everyone, whereas bank notes and coins are universal across all income brackets and populations. Everyone can use physical money, from developing countries to advanced ones, and from the poorest subsets of our population to the richest.
2. Small Ticket Items
Cash is also the most popular payment option for small transactions under $10, which account for a lot of transactions. Many people do not want to pay the transfer or user fees associated with electronic payment options for such small transactions. And most Canadians will have small change on them for these types of smaller purchases. Whether it’s transportation, food, or entertainment, people prefer to pay for small ticket items with physical money.
3. No Threat of Hackers
People who use physical money are less at risk. They don’t have to worry about hackers gaining access to their personal transaction histories and using their personal data to commit identity theft and credit card fraud under their names. Using physical money can give them peace of mind.
4. It’s Untraceable
Many people also prefer to use bills and coins because this type of payment is untraceable. They can buy gifts for their spouses without the transaction showing up on their credit card bills. They can buy what they want without their parents tracking their spending. And they can even stay off of the radar from the government when they use cash. To many, its lack of traceability makes physical money quite attractive.
5. Widely Accepted
You can go into a store and not worry about whether or not you can pay with bills and coins—this payment form is accepted everywhere. Not so with the other options. Many small businesses like convenience stores and retailers refuse to accept credit cards and debit cards due to the high fees. Mobile payment options are even rarer because they’re too new. But cash is widely accepted. You can feel confident that you’ll be able to purchase what you want when you pay with bills and coins.
6. Finality of Payment
Many people also enjoy the finality of payment that comes with using physical money. They don’t have to worry about their funds clearing. They don’t have to worry about having enough money in their accounts to pay off their credit card balances later on. They can pay the exact amount, get their merchandise, and move on, never having to worry about it again.
7. Controlling Spending
The all-cash diet is popular among money-strapped Canadians. When you only take out a specific amount of money at the ATM, that’s all you have to spend, when you can otherwise easily go over your budget with a credit or debit card, leading to regret later on. People also feel increased accountability when it comes to using paper money, so they spend less.
No time soon will physical money be a thing of the past. It’s still the top method of payment with far too many benefits for it to disappear.
