Despite the growth in alternatives such as debit and credit cards, Canadians still use cash to process more than half of all transactions, the Bank of Canada calculates.
In a report released Thursday, the bank took a closer look at how Canadian shoppers and retailers pay for various products and services.
Overall, while debit and credit cards are becoming more popular — especially for larger purchases — cash is used to pay more overall.
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The bank crunched the numbers for 2015 and found that across all types of merchants, 51 per cent of all transactions were conducted in cash that year, the bank said.
That compares with 31 per cent for debit and 19 per cent for credit cards. (The bank cautions that "percentages may not always add up to 100 per cent because of rounding.")
"We find that cash is still widely used, especially for small-value transactions, even at large businesses that accept cash and cards," the bank said. "Debit cards are used mainly for medium-value transactions and credit cards for large-value transactions."
In terms of the overall dollar value, credit cards tend to be the payment option of choice. A little under a quarter of the total value of sales in Canada in 2015 involved cash. A little more than a third of the time, debit payments were used, and credit cards were used the rest of the time (42 per cent).
Credit cards have grown in popularity, especially given how much consumers love reward points.
"By offering various consumer incentives, credit card companies promote the adoption and use of credit cards by consumers," the bank notes.
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But even those "free" perks come with hidden costs. Canadian merchants spent almost $10 billion in costs related to processing fees in 2014. Almost two-thirds of that came from credit cards, some of which have one or even two per cent surcharges from the card providers.
The average credit card transaction cost a merchant $2.08 to process, the bank said. That compares with a per transaction cost of 30 cents for debit cards and 29 cents for cash, with the costs covering expenses like the time spent counting it and depositing it in the bank, and detecting counterfeits.
Across all merchants, the average cash transaction was for $8.04 in 2015. For debit, the average jumped to $28.33 and for credit, it was up to $43.85 per swipe.