“A 2013 MasterCard report found that in 2011, cashless payments made up 66 percent of global spending,” reports Tamara E. Holmes on CreditCards.com, “Consumers in Belgium, France and Canada used cash the least in 2011, as cashless payments made up 93 percent, 92 percent and 90 percent of payments respectively.” So what does that mean exactly? Well, it certainly confirms the belief that Canadians are among the most plastic-friendly people in the world.
Evidently, research has shown that Canadians prefer to pay for their purchases using credit cards and debit cards. So, as we pointed out in our last blog, it’s certainly time for Canadian merchants who are holding on to their “cash only” ways to change their views about the way they process payments. Canada is quickly becoming a cashless society as most Canadians walk around with little to no cash on their persons.
For cash only businesses, this is simply bad news. Only accepting cash cuts customers off from making important purchases. This is especially true for big ticket items. Holmes points out that when it comes to big purchases, most prefer to use credit cards. Debit cards, however, are preferred for every day purchases. At least, this is what was concluded following a 2014 TSYS online survey of 1,000 consumers who owned both credit cards and debit cards.
“When asked their preferred payment type, 43 percent of Americans chose debit cards compared with 35 percent who preferred credit cards and just 9 percent who preferred cash,” reveals Holmes, “According to TSYS, credit cards remained the preferred payment method for the same percentage of people in 2014 and in 2013, but the percentage favouring debit cards fell from 49 percent in 2013 to 43 percent in 2014.”
One of the reasons credit cards and debit cards are preferred over cash is the growing popularity of online shopping. Clearly, they have not yet invented a way for customers to insert dollar bills into their computers or smartphones in order to pay for purchases. And we’re sure they never will invent such a thing. By accepting credit and debit online, merchants from all over the world have been able to greatly expand their customer bases.
“Plastic is also Americans\’ top choice for online shopping, with 48 percent in 2014 preferring to use credit cards, 30 percent using debit cards and 12 percent using PayPal,” informs Holmes, “Besides online spending, credit is the preferred payment for the most people at department stores, while debit rules at the supermarket and discount stores. Both are equally popular at gas stations and dine-in restaurants.”
She also notes that there is another reason that our society is straying away from paying with cash. It actually costs them more to do so! Using cash comes with a cost, reports Holmes. She writes that a 2013 Tufts University study found that Americans spend upwards of $200 billion per year to use cash. This averages out to $1,739 per household.
“The cost is attributed to such factors as ATM fees, theft, and time spent traveling to get cash,” she reveals, “Unbanked Americans pay on average $3.66 per month more than banked consumers to get cash, according to the study.” It’s no secret that Canadians also have to bear the brunt of ATM fees, theft and other expenses related to having to use cash. And this is just another reason why it’s used so infrequently.
It’s time to stop allowing this growing trend to hurt your business. To learn how you can begin processing credit card and debit card transactions using top-of-the-line Countertop and Wireless POS terminals, call Canadian POS Corporation at 1-877-748-2884 or email us at info@localhost.