Can you remember the last time you used cash to purchase something? Honestly, I can’t. Unless I happen to come across change in the house or in my car, plastic has officially become my primary method of payment. With the onset of COVID-19, many consumers were forced to make the shift to using plastic vs cash to limit the spread of the virus, and with this came a monumental shift in society, as well as a change in consumer behaviour.
According to Statistics Canada:
82% of Canadians shopped online in 2020, versus 73% in 2018.
Canadians spent a total of $84.4 billion online, versus $57.4 in 2018.
Canadians who shopped online
- 90% of those 15 to 24 years old
- 95% of those 25 to 44 years old
- 83% of those 45 to 64 years old
- 55% of those 65 years old and over
What did Canadians buy online in 2020?
- 68% bought digital goods or services
- 76% bought physical goods
- 9% bought peer-to-peer accommodation services
- 49% bought other services
Physical goods by subscription
- 16% of Canadians had an online subscription for physical goods: 7% for meal kits boxes. 5% for groceries such as food or beverages. 9% for other physical goods.
Did you know?
13% of Canadians ordered groceries online for the first time during the COVID-19 pandemic. 9% bought other physical goods online for the first time.
With the increase in online purchasing across a wide variety of goods and services, it’s important to re-evaluate your business offerings, perhaps you’re missing out because you don’t offer the option of online purchasing.
In addition to the consumer behavioural benefits, the balance have summarized a few business-related benefits of a cashless society:
Benefits of a Cashless Society
Those with the technological ability to take advantage of a cashless society will likely find that it's more convenient. As long as you have your card or phone, you have instantaneous access to all your cash holdings. Convenience isn't the only benefit. Here are some other benefits.
Lower Crime Rates
Carrying cash makes you an easy target for criminals. Once the money is taken from your wallet and put into a criminal's wallet, it'll be difficult to track that cash or prove that it's yours. One study by American and German researchers found that crime in Missouri dropped by 9.8% as the state replaced cash welfare benefits with Electronic Benefit Transfer (EBT) cards.
Automatic Paper Trails
Similarly, financial crime should also dry up in a cashless society. Illegal transactions, such as illegal gambling or drug operations, typically use cash so that there isn't a record of the transaction and the money is easier to launder. Money laundering becomes much harder if the source of funds is always clearly identifiable. It is harder to hide income and evade taxes when there’s a record of every payment you receive.
Cash Management Costs Money
Going cashless isn't just convenient. It costs money to print bills and mint coins. Businesses need to store the money, get more when they run out, deposit cash when they have too much on hand, and in some cases, hire companies to transport cash safely. Banks hire large security teams to protect branches against physical banks' robberies. Spending time and resources moving money around and protecting large sums of cash could become a thing of the past in a cashless future.
International Payments Become Much Easier
When you travel, you may need to exchange your dollars for local currency. However, if you're traveling in a country that accepts cashless transactions, you don't need to worry about how much of the local currency you'll need to withdraw. Instead, your mobile device handles everything for you.
In addition to the above benefits, AppDirect noted the benefit of:
Accounting Peace of Mind
Going cashless may allow you to automate specific accounting and bookkeeping tasks. This automation can be especially welcome when filing taxes because all the transaction data, including sales tax information, is organized and at your fingertips.
You can also send transaction data to other tools or databases to improve customer service, product selection, or marketing.
You can import transactions into your accounting software, which can assist with record-keeping and give you easy access to profit data. Automation can help reduce human error that is always possible with traditional accounting.
Not only does this save time and keep you from having to retain a professional accountant, but it also provides peace of mind in the knowledge that all the information that you could need is available and properly organized.
If you think it’s time to make the switch, or are unsure whether you can, give us a call!
At REM Web Solutions, we acknowledge and understand the shift toward a cashless society can be very daunting. We have created tools such as our ecommerce module and others to help you navigate the waters to best position your business to adapt to the new cashless society we have become.