All throughout Canada, there exists a growing trend that the majority of retailers have gotten quite used to. Shoppers are showing a preference for paying with plastic. Credit card and debit card use appears to be all the rage, here in Canada. Many consumers even admit to never carrying any cash on them at all.
Cathy Vigrass is Square’s Head of Canada. As she reveals in The Finanical Post, Canadians are proving themselves to be “card-first” buyers. The findings of a national study conducted by Square earlier this year, reveal that 79 percent of Canadians prefer to pay for purchases with either credit or debit cards.
“Businesses that don’t accept cards run a risk, as the average Canadian customer has only $46.50 on them in cash, and hasn’t visited a bank or ATM to withdraw cash in 17 days,” notes Vigrass, “This means that when a customer wants to buy, but card payments are not in the mix, it’s a gamble to hope that Canadians have enough cash in their wallet to cover a purchase.”
With the average Canadian carrying less than $50 cash on their persons, it’s important for merchants nationwide to seriously consider whether or not operating a “cash only” business is a viable option. Will $50 cover most of the expenditures that occur in your place of business? Most merchants are likely to agree that the more customers spend in their stores, the better. Accepting only cash, quite obviously, is very limiting
Stephanie Mercier of CBC News reports that some retailers are choosing to adopt cashless systems. She highlights a restaurant in Vancouver and an Ontario-based salad company as examples. Mercier also points out that although cash is still legal currency, it isn’t actually mandatory for Canadian businesses to accept it.
“According to the Bank of Canada, retailers don’t have to take bills or coins ‘because both parties must agree on the payment method,’” explains Mercier, “And although just over half of all purchases in the country are still made in cash, the evidence that Canadians are moving away from physical money is mounting as digital systems — not just credit cards and debit cards, but smart phone payment technology as well — are more widespread and easy to use.”
Vigrass highlights the fact that cash only businesses lose out on sales for big ticket items. This was experienced first-hand by Square’s co-founder, Jim McKelvey who once owned a glass-blowing business. He was forced to forfeit a $2000 sale because he didn’t accept credit cards at the time.
“Too often, small businesses make the mistake of focusing on how they want to be paid, and not how their customers want to pay them, which leads to them not getting paid at all,” writes Vigrass, “That is a huge challenge as no business, large or small, can afford to miss out on sales.”
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