How a Cashless Society Works

With contactless technology gaining traction, it's estimated that cash now accounts for merely 10% of all payment methods in Canada. However, this doesn't imply that the country is completely moving away from cash. Let's explore this trend further.

The movement towards cashless transactions is particularly noticeable among younger individuals, who frequently use contactless cards for payments. This figure marks a significant decline from 35% in 2014 when cash payments were more prevalent.

According to Sharon Kozicki, the deputy governor of the Bank of Canada, there remains a solid demand for cash despite its decreasing use. Cash transactions continue to hold importance for Indigenous populations, the unhoused, senior citizens, and other vulnerable communities.

In summary, cash transactions remain widely utilized. Nevertheless, regulatory measures to facilitate the transition from cash to cashless in Canada are still to be established.

While the imminent future does not suggest an immediate shift towards a cashless society in Canada, it is important to recognize the benefits that such a society could offer:

• Ease of Use: For both businesses managing financial systems and customers purchasing items or services, cashless payments streamline processes, making them easier than handling cash. Furthermore, platforms like Uber allow users to sidestep the hassle of carrying physical money.
• Enhanced Security: Storing funds in a cashless system provides significantly better protection. All transactions are encrypted, tracked, and backed by strong security measures from financial institutions.
• Consistent Accessibility: Cashless funds can be accessed anytime, anywhere. For instance, when traveling, you can manage your finances digitally without needing to withdraw cash.

To provide a balanced view, it is essential to consider the drawbacks of a cashless society, which include issues of privacy, potential exclusion, and criminal activities:

• Reduced Privacy: In systems reliant on cashless payments, every transaction is tracked. Some individuals prefer anonymous transactions and may turn to cash or cryptocurrency for this reason, which might make mandatory cashless payment systems feel intrusive.
• Exclusion of Certain Demographics: Not all people, particularly the elderly, are digitally adept, nor do they live in areas where cashless payment methods are prevalent. For them, transitioning to a cashless society may introduce new hardships.
• Complex Financial Crimes: The criminal element typically favors cash transactions, making illicit money easier to conceal. A shift to a cashless society would compel criminals to devise new, less traceable methods involving offshore money laundering and intricate schemes to evade law enforcement.

Using the Google Keyword Planner, we assessed the search volumes to understand the popularity of various digital wallets from August 2022 to September 2023. The searched terms included:

• Visa Checkout
• Venmo
• Skrill
• Samsung Pay
• Paypal
• Meta Pay
• Mastercard click
• Klarna
• Google Pay
• Cash app
• Apple pay
• Amazon pay
• Afterpay

With this information, we identified the Canadian and U.S. locations that yield the highest Google search interest for 13 cashless payment options. The term 'per capita' refers to the number of searches per 1,000 residents. Each location was evaluated for every search term and assigned an index score ranging from 0 to 1. These scores were aggregated to create an overall score out of 13.

The Top 15 Canadian Cities for Cashless Payments

Leading our index is Victoria, situated on Vancouver Island and the capital of British Columbia, remarkably ranking highest across most categories. digital payment method , except for 'Mastercard Click,' which recorded no searches per 1,000 residents; thus, Victoria falls short relative to cities like Saskatoon, Ottawa, Montreal, and Toronto.

Following behind is Vancouver, which surpasses St. John’s, Toronto, and Montreal. Interestingly, these cities also secure top ranks for various services such as 'Amazon Pay,' 'Klarna,' and 'Samsung Pay.' Skrill ’ Google searches.

In sixth place we find Kelowna, followed closely by Windsor and London, with Calgary and Oshawa completing our top ten. Notably, London residents have logged the second-highest searches for 'Mastercard Click' at 23.7 per 1,000 residents.

Lastly, Ottawa, St. Catharines, Saskatoon, Kitchener, and Halifax complete the list of the 15 Canadian cities most equipped for a cashless future.

Top 15 US States for Cashless Spending

Topping the charts is Texas, known as the Lone Star State. Residents of Texas actively search for 'Klarna' and 'Samsung Pay' more frequently per capita than any other state, while it ranks only 12th for 'Apple Pay', 11th for 'Google Pay', and 30th for 'Venmo'.

Following Texas are Alabama, Florida, Virginia, and Nevada. Of these, Alabama holds second place overall for per capita searches of 'Klarna' and 'Cash App'. Nevada records the highest searches for 'Google Pay', while Virginia ranks fourth for 'Paypal', with both Nevada and Florida showing strong interest in 'Samsung Pay'.

In sixth place is Maryland, with South Carolina and Mississippi taking seventh and eighth positions respectively. Delaware and Louisiana round out the top ten.

Interestingly, all five of these states perform well across a variety of metrics. For example, 'Afterpay' is favored in Mississippi and Maryland; 'Cash App' sees high search volume in Mississippi and Louisiana; 'Amazon Pay' is frequently searched in Delaware and Maryland; and 'Klarna' shows significant activity in Maryland and South Carolina.

The rankings continue with North Carolina leading the way over New York and Georgia, with Kansas and California following at 14th and 15th. Notably, despite their less impressive overall rankings, Georgia ranks highest for per capita searches of 'Afterpay,' 'Cash App,' and 'Apple Pay; California excels for 'Amazon Pay,' and Kansas leads for ' Paypal ’.