The Toronto District School Board began accepting online payments in 2018 for school activities, freeing parents from the hassle of finding $5.50 in cash to pay for their child’s pizza days. The board turned to KEV Group Inc. for payment processing software.
“When we started selling cashless solutions to school boards in 2007 there were a few early adopters, but for the most part they didn’t think it was something that school administrators or parents would use,” Bram Belzberg, chief executive of KEV Group, wrote in an e-mail.
Now, according to Mr. Belzberg, it’s become something that every school wants. The way he sees it, the advantages are clear: Parents are rewarded with convenience, the school gets an easier way to track money and teachers are freed from collecting loonies and quarters.
Consumers aren’t the only ones benefiting from the shift. Some businesses find that handling less cash speeds up their operations and makes them less prone to robberies, while apps let retailers track consumer preferences. Declining cash helps authorities squeeze tax evaders and money launderers.
“If cryptocurrencies such as bitcoin were ever to become widely used, the demand for cash could fall further,” researchers at The Federal Reserve Bank of Chicago wrote in a 2018 report.
For all the apparent advantages of becoming a cashless society, though, cash is very persistent in some ways. In Canada, the value of outstanding $100 bills has risen to $47.1-billion, up from $15.7-billion in 2000. Some observers believe the increase suggests cash remains popular for the purposes of tax evasion and organized crime.
According to the Federal Reserve Bank of San Francisco (FRBSF), the cash in circulation within 42 countries increased by an average of 238 per cent from 2006 to 2016. Canada’s cash in circulation increased 59 per cent over this period despite the rising popularity of non-cash alternatives; Sweden’s shrinking amount of outstanding cash was a notable exception.
Why do some people still like cash? In a blog post, the FRBSF said that, apart from being convenient for some consumers, cash also satisfies a need for physical savings during nerve-racking times: “It can be convenient and reassuring to have immediate access to money, especially in case of an emergency or in situations of political or economic turmoil,” the FRBSF said.
The financial crisis is widely credited with driving cash levels higher in many countries, the FRBSF added, while low interest rates have reduced the pain of missing out on interest payments that hoarders of cash could be getting from the bank.
Cash is also preferred by some small businesses, such as independent coffee shops, where the cost of credit card transactions eats into slim profit margins. Older Canadians, who might not have access to intricate mobile phones or feel comfortable with apps and contactless terminals, are also more likely to prefer cash.
And of course, the privacy of cash offers another argument in its favour, especially if legalized marijuana remains largely confined to Canada.
“Cannabis is illegal in most jurisdictions outside of Canada and, as a result, the personal information of cannabis users is very sensitive. That is the context in which we advised purchasers who are concerned about using their credit card to consider using cash if that option is available,” a spokesperson for the Office of the Privacy Commissioner of Canada wrote in an e-mail.
Cash may be going. But it’s by no means gone.