Cash is dead, long live cash

Given the adoption of mobile payments and recent pushes to use plastic, could the end be near for bills and coins?

Cash, we’ve been told, is king. But now it seems the king is being sent to the gallows, with banks, credit card companies and mobile payment app-makers blocking the path back to the castle.

The change is happening at an astonishingly fast pace, when you consider the first modern-day credit card was reportedly only introduced in the 1940s and online shopping in the ’90s.

Now, paying with the wave or tap of a card or mobile device is being readily adopted, while an interest in digital currencies like Bitcoin is rising. The Royal Canadian Mint even began developing a digital payment system, called MintChip, in 2012, though in April it halted the program and says it plans to sell it to the private sector.

Cash-free heavyweights like MasterCard, Visa and Interac are doing their best to hasten the end of cash at retail with serious investments in marketing their products as superior to bills and coins. For instance, Interac and Zulu Alpha Kilo’s “Be in the Black” TV spot shows ordinary people feeling like rock stars after paying with debit, avoiding credit card debt stress.

Meanwhile, Visa’s “Smallenfreuden” campaign made waves after the brand launched a full-on integrated push, starting as a teaser asking people if they smallenfreuden and growing to TV, OOH, social and PR, to promote the idea of paying for small purchases with a card rather than cash.

The companies are also giving incentives to go cashless, with MasterCard promising that PayPass-enabled smartphones will soon provide access to deals and discounts.

A recent study by the Martin Prosperity Institute, part of the University of Toronto’s Rotman School of Management, notes cash accounted for less than 50% of all transactions in 2011, down from 85% in 1992. A MasterCard Advisors study from September 2013 said Canada was, along with Belgium and France, one of the countries closest to going cashless, with cash comprising about 10% of the total value of consumer payments.

But will cash payments cease altogether? Jason Dubroy, VP managing director, Shopper DDB, says it has become fashionable to predict an expiry date, but he doubts it will happen in his lifetime. In Canada, he says, boomers will likely remain loyal to the “king” and are unlikely to walk around without a few bills in their wallet.