Cash is still vitally important, even as society’s transition toward digital payments accelerates, according to Royal Canadian Mint President Marie Lemay.
During the COVID-19 pandemic, as businesses closed their physical doors and consumers shifted their buying online, there was an immediate and dramatic impact on coin demand. Lemay noted recently that coin demand is starting to resurge. The question we still need answered is how far it will rise.
Even as we enter a world where we’re seeing increasing digital payments, Lemay said Canadians also value having access to physical money. two thirds of Canadians surveyed reported using cash within the last month. This trend parallels coin use trends in the United States where over 60% of Americans said their weekly purchases are paid for using cash, according to a Pew Research study.
“I don’t think we’ll ever see a situation where people just use credit or debit cards,” said Americans for Common Cents Executive Director Mark Weller. About 25% of US households are either “unbanked” or “underbanked,” typically those with lower incomes who lack the minimum balance to open checking and savings accounts. Transitioning to solely digital payments and credit cards will only limit the places where disadvantaged individuals, people in rural communities, and communities of color can access goods and services.
The Canadian Mint President also noted that Rogers Communications’ internet outage in the summer of 2022 that took down the Interac payment network proved the value of a reliable physical currency. She said the Royal Canadian Mint is equipped to scale up very quickly if a natural disaster or some other unforeseen event led to a dramatic increase in demand for cash. Common Cents’ Weller agreed that cash ensures economic stability. “Digital payment systems are vulnerable to blackouts, technical glitches, and cyberattacks that endanger individuals and society to immediate economic collapse.”
“Cash can’t be hacked. Cash also serves as a fallback solution in times of financial calamity,” Weller added. Many Florida restaurants and gas stations accepted only cash in the wake of Hurricane Ian in September 2022. These businesses needed electricity and an internet connection –which did not exist or was unreliable– to process payments and track sales.
Cash demand skyrockets during crises, be they man-made or a natural disaster. We shouldn’t abandon the infrastructure that supports the economic stability of cash in Canada or the US and the vital role cash and coin play in our economy.