The COVID-19 pandemic has sped up the already-declining use of money in Canada as extra folks have switched to utilizing debit and bank cards, and that change is hurting folks whose livelihoods rely upon money.
When the pandemic hit, many companies began asking people to use debit and credit cards instead of cash out of concern of transmitting COVID-19 through cash. Some stores even stopped accepting cash altogether.
This has led to a “very dramatic decline” within the quantity and worth of ATM withdrawals, stated Tracey Black, president and CEO of Funds Canada, the group accountable for the digital motion of cash in Canada. Debit card funds, interbank transactions, direct deposits, invoice funds and extra all undergo Funds Canada.
Earlier than the pandemic even began, money was already falling out of favour with many Canadians. Between 2013 and 2018, use of money declined 40 per cent, shedding virtually three billion transactions to debit and bank cards, in accordance with Funds Canada.
Black stated that development will proceed.
“At level of sale, we are going to proceed to see a decline in money and a rise in the usage of digital fee choices as a substitute,” she stated.
Fewer folks utilizing money has already began to harm individuals who reside and work on the road, stated Jeff Karabanow, a social work professor at Dalhousie College in Halifax. He stated panhandlers, avenue musicians and performers all depend on money.
“I’ve observed over the past three months throughout COVID that lots of people which are experiencing poverty and homelessness could not form of, work the streets as they did for survival,” stated Karabanow.
Karabanow worries how these folks will assist themselves.
He stated many individuals residing on the road lack a house tackle, correct identification and the means to pay charges to open a checking account, so that they haven’t any entry to banking and may’t settle for cash despatched through e-transfer.
“The oldsters that I work with which are experiencing poverty … both on the streets or are just a few paycheques away from the streets, it should once more marginalize and exclude them from civil society,” stated Karabanow.
Kendall Value is experiencing that exclusion first-hand.
He is an anti-poverty advocate in Halifax who makes use of money to assist handle his funds. However in the course of the pandemic he is run into conditions the place his cash is not accepted. Lately at a grocery retailer, he went to the one checkout that also took money.
Regardless of that, when he tried to pay with money, the cashier refused his cash. So he ended up having to pay along with his debit card.
“I did not wish to as a result of I knew that was going to extend my service fees to my account on the finish of the month,” stated Value.
For somebody who lives on a good price range, saving each cent issues.
Elevated use of debit and bank cards could be dangerous, stated Rob McLernon, a licensed insolvency trustee with Grant Thornton in Halifax.
He stated money makes it simple for folks to see how a lot they’re spending and so they can actually see or really feel how empty their purse or pockets is afterwards.
As a result of debit and bank cards provide no visible or bodily cues that alert folks to how a lot cash they’re spending, they’ll find yourself in debt.
McLernon stated folks have extra of a reliance on credit score than ever earlier than.
“It is the, ‘I need all of it, and I need it now syndrome.’ In the event you begin shopping for issues that perhaps you may’t actually afford as we speak and hoping that tomorrow you will have extra funds to have the ability to pay for it, you recognize, it may actually be a recipe for catastrophe,” he stated.
McLernon stated credit score and debit playing cards are effective so long as they’re used responsibly and folks do not go into debt. Digital funds even have their place, providing folks handy methods to purchase items with out getting near others.
And that helped preserve the Canadian economic system afloat in the course of the pandemic, stated Black.
“I believe Canadians are appreciating the worth of digital funds and I believe that this example that we discover ourselves in has simply supplied extra alternatives for us to know the worth of paying electronically over paying with money,” she stated.
Because the nation strikes additional away from utilizing money, Karabanow stated society wants to verify no person is left behind, particularly those that cannot get debit or bank cards.
“As soon as once more, these people are going to be excluded from simply fundamental financial transactions if we transfer rather more to a cashless surroundings, so I believe we’ve got to watch out, we’ve got to be cautious,” he stated.