When I went shopping the other day there were a number of young girls at the cash registers bagging people’s groceries. They were raising money for their dance troupe and expecting donations. It occurred to me that not many people actually carry cash around anymore. How did this affect their fundraising efforts?

I wonder if there’s been a noticeable decrease in donations received from such charities as Remembrance Day poppy sales and the Salvation Army Christmas kettles now that people have fewer coins and bills in their pockets. I used to regularly toss my loose change into those little plastic boxes at many store checkout counters.

Related: What’s in your wallet?

Consumers are making less use of cash, while the use of electronic payment methods continues to increase.

“I don’t carry cash on me”

Credit and debit cards are continuously evolving, presumably for security reasons, but it’s becoming almost effortless to pay for your purchases.

With “Tap-and-go” cards there’s no longer the need to enter (and memorize) a PIN or sign for your purchases.

With Visa PayWave and MasterCard PayPass contactless cards you don’t need to tap anymore – just wave your card in front of the terminal.

We won’t even have to carry all those pesky cards with Virtual wallets such as Apple Pay and Google Wallet (not yet available in Canada). You load all your debit and credit cards onto your phone (or Apple Watch), and then simply hold it near a contactless reader and pay by pressing “Touch ID.”

Related: In defense of smallenfreuden

The Royal Bank has started a pilot project using a wristband, which maps the pattern of your heartbeat for identification when making payments. Surprisingly my 85-year-old mother seemed quite intrigued by this payment method. She’s going to ask for a wristband next time she goes to the bank.

(My husband’s cardiologist is attempting to regulate his heartbeat. I wonder if he’d have to have his wristband recalibrated each time he changes his medication.)

Is your spending in a database?

Every payment with credit and debit cards and payment systems like PayPal and Western Union is instantly monitored and placed in a data base and made available not only to retailers, but also the government and to countless spammers who will use that information. There are some people who are quite paranoid about a means of exchange that is always traceable.

Related: Email money transfers – A convenient way to send cash

Cash is the only payment method that’s anonymous and untraceable, which is no doubt why it’s favoured by “under the table” contractors and drug dealers.

Cash is still necessary

There’s no question that a lot of people have trouble keeping track of their finances, especially without cash money. People learning to budget use the “envelope system,” and Gail Vaz-Oxlade is famous for advocating the cash jar method of budgeting and controlling finances.

Although many deny it, research has shown that people spend more when using debit and credit cards.

Children learn about money with coins and bills.

Cash is still a necessary form of payment at farmer’s markets, garage sales and lemonade stands, not to mention buskers and panhandlers. You still need it for some vending machines and bus fare.

Related: Why cheques won’t disappear anytime soon

It’s good advice to stash a couple of hundred dollars in cash at home in case of a disaster, or your ATM crashes.

Final thoughts

Are we heading towards a cashless society?

Not necessarily anytime soon. Rather, we will be a society that carries less cash. Cash may no longer be king, but it’s not obsolete yet.

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13 Comments

  1. Atticus on December 3, 2014 at 6:59 am

    Hi Marie,

    Some interesting observations and comments.

    Here in Japan, it’s still largely a cash society. Sure, credit cards have made inroads, but a lot of stores only accept cash, so people carry around wads of bills. The Japanese are conservative people, so Cash will prevail for a long time to come, just as Japanese will remain habitual savers of money.
    Quite a contrast to Canadians, eh?

    Keep up the good blog!

    • Boomer on December 3, 2014 at 4:36 pm

      Hey Atticus: It’s interesting to hear of customs in different parts of the world. I knew that the Japanese were great savers, but I always thought of them as being so “techie”. I guess that doesn’t apply to their financial lives.

      Thanks for stopping by.

      • tom on December 4, 2014 at 6:09 pm

        I have a japanese wife and many japanese homestay students. They are not any more or less techie than people here, but the cultural difference is that they embrace fads super quick. For instance it is rare for a music group to last more than one hit. They also do not have the same retirement systems we have here, so they have to save.

  2. Gary on December 3, 2014 at 8:37 am

    we spend a lot of time in the states during the winter so we do a lot of online shopping using paypal, ebates etc. i wondered why i was getting unsolicited emails and ads for items i was interested in on my web pages. thats is a real bummer. i agree with you marie; cash is on the way out. i had to dig deep to put a few bucks in the salvation army kettle yesterday. by the way; they still ring their bells down here!

    • Boomer on December 3, 2014 at 4:41 pm

      Hi Gary: I hope you bypassed the big snowstorm in Buffalo on your way south.

      Don’t you think it’s convenient, though, not to have to exchange all your currency when you travel back and forth? Or use travellers cheques (do they still sell those)?

      • Gary on December 4, 2014 at 8:01 am

        we missed it this time but we’ve been caught in a few doozies going home at christmas. yes, it’s great not having to carry a lot of cash. we use the sear’s master card … no 2.5% foreign transaction fees; although i’ve read sears and master card are parting ways next november.

  3. Elizabeth on December 3, 2014 at 4:54 pm

    I have a hard time finding Salvation Army kettles where I live! I think the flip side of fewer cash donations is being able to donate via text message or online. It’s easy to donate small amounts (a couple bucks here or there) with cash, but I wonder if people donate more when they use electronic payments?

    Marie, you might be interested in David Wolman’s book, “The End of Cash”. I’m not sure I agree with all of his arguments, and the I think the book was written before bitcoin.

    • Boomer on December 4, 2014 at 3:20 pm

      @Elizabeth: It would be interesting to see if people donate more online.

      I’ll check out the book. Thanks for the recommendation.

  4. Travis @Debtchronicles on December 4, 2014 at 7:54 am

    I’ll be the last person to give up my cash….it keeps me on budget and focused. I’m not ready to give it up!!! 🙂

  5. Barry @ Moneywehave on December 4, 2014 at 9:56 am

    Personally, I use credit whenever possible but that’s because I’m a bit of a points whore. I will use cash or debt at small businesses so they don’t have to pay the merchant fees.

  6. Sean Cooper, Financial Journalist on December 5, 2014 at 10:01 pm

    I always make sure I carry cash… or at least my debit card. Although PayPass is great, I’m on my fourth MasterCard because the darn thing keeps breaking. You don’t know how annoying it is to be in line at the supermarket only to have your credit card not work.

  7. Mrs. Frugalwoods on December 6, 2014 at 7:44 am

    Interesting! I confess we never carry cash. We use credit cards for everything because we like to utilize rewards points as much as possible. We pay our cards off every month and haven’t ever had any credit card debt, so it works well for us. I also love the ease of paying with credit, it’s just faster and smoother. It is sort of bizarre though to realize that I never actually see our physical money–it’s all virtual!

  8. Sierra on December 6, 2014 at 9:26 am

    I use all three methods of payment- cash, credit and debit

    Cash- I refuse to charge anything that is only a few dollars, such as coffee, parking tokens, small purchases at the mall. I don’t drop into coffee shops often enough to warrant a specific card. I use cash when I am on the road, as it is pointless to charge a package of gum or a bottle of water at a pit stop. I don’t like to charge a restaurant meal when my husband and I eat out; it really annoys me to be paying for something now that was digested 3-4 weeks ago. I take out a certain amount of cash each month to use; when it’s gone, then I have to wait until next month. I also refuse to pay the extra 50 cents for debit purchases at a small business or corner store.

    Credit- 99% of my credit charges are planned. I use credit to rack up the grocery points; I use a cash back card for purchases at other stores; auto fuel goes on the gas card as it is easier than carrying around gas money. Large planned purchases go on the card, as does some of the Christmas shopping. If I get into the habit of charging small purchases (under $10), then the charges will add up and play havoc with the budget.

    Debit- I will use debit when paying for medication co-pay at the drugstore, at the LCBO, for items that I know I have covered. It is too easy to lose track of the balance in my account, and debit can interfere with bill payments. All of my utility payments are now on-line.

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