The use of cash is steadily declining in Canada. Cash is gradually being replaced by electronic payment methods, mainly credit and debit cards. Although still a marginal phenomenon, the trend towards cashless retailing has also begun.
While economic gains can be identified for the state and financial institutions, the direct benefits of this transition for merchants and, above all, consumers appear more mixed. The majority of merchants feel that the cost of accepting payment cards is too high, and that the advantages of refusing cash in their establishments do not outweigh the disadvantages.
Eliminating cash would expose consumers to a myriad of risks, both financial and operational - not to mention the privacy and budget management issues such a transition raises. A cashless society would also entail a risk of exclusion for the economically disadvantaged: the biggest users of cash are low-income consumers, the elderly and those with the least education. Similarly, unbanked and under-banked Canadians are particularly dependent on cash.
In focus groups, consumers said they would like to keep cash in circulation in Canada, even if they prefer to use electronic payment methods. Control, freedom, anonymity, simplicity: cash has many advantages that payment cards can't really replace. Consumers are offended when merchants refuse their cash, even if they are resigned to their policies. In short, consumers want to be able to choose how they pay, and consider it illegitimate to have this democratic means of payment taken away from them.
In Canada, monetary policy, including the power to grant legal tender status to a payment instrument, is the responsibility of the federal government. However, issues relating to the refusal of cash by a merchant involve both provincial provisions, derived from contract law, and federal provisions. In the common law provinces, the rights of each party vary according to whether or not an agreement has been reached between the creditor and debtor regarding payment methods. In Quebec, civil law provides a framework for the dischargeability of payment methods; however, the scope of these standards remains imprecise. This legal framework is complemented by disparate standards of protection, which could sometimes be applied to cash users.
States abroad have recently adopted laws or public policies to protect cash users. These provisions, which compel merchants to accept cash, could serve as an inspiration in Canada. In conclusion, Option consommateurs recommends that the Currency Act be modernized to compel merchants to accept cash offered by consumers, and that legislation be put in place to harmonize the legal regimes of all electronic payment methods.
