10 Best Cashless Solutions in Canada

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The Canadian financial and payment culture is rapidly tilting towards an entirely cashless society with the gradual fading of cash transactions. Digital and mobile payment technology have made transactions fast, convenient, and effortless, such that Canadian consumers can now make accelerated transactions without carrying their physical wallets around.

The primary concern of some skeptic Canadian consumers is the security of cashless payment solutions. Over time, technological innovations and advanced security measures employed by many digital payment providers to minimize the risk of fraud have proven that cashless technology offers a more promising alternative to banknotes transactions.

Canadian Cashless Trend

A recent study of countries with contactless payments has ranked Canada as the most probable first cashless country globally. From the survey conducted by money.co.uk, Canada has the highest contactless payment limit of CAD250.

The report used data sourced from the world bank and debit/credit card providers, based on some economic factors, including the number of ATMs per 100,000 adults, percentage of the population aged 15+ with a debit or credit card, the contactless payment limits, and the number of major e-wallet operators in the country.

As a result of the early adoption of modern payment systems, including electronic funds transfer, EMV Chip and PIN, and other contactless payment options, Canada is among the global countries leading the cashless payment trend. The majority of Canadians have and use credit cards for payment. In no time, we could see the extinction of the banknotes and the total adoption of a cashless society in Canada.

What is a Cashless Payment?

A cashless payment or cashless transaction occurs when there’s an exchange of goods and services without conventional bank notes or cash for payment. Cashless payments involve using credit cards, debit cards, digital wallets, or any form of online payment.

Canada’s Popular Cashless Solutions

1.      Credit Cards

A credit card payment solution is unarguably the most popular payment alternative to cash, not just in Canada but in every cashless society across the globe. According to the Bank of Canada, about nine out of ten Canadian own and use a credit card.

Credit card usage in ecommerce and payment transactions is gaining more popularity than debit cards due to its advanced security features and convenience. Some major credit card issuers, including MasterCard, Visa, and American Express, allow users to earn rewards while using their cards for payments.

2.      Debit Cards

Another cashless solution is a debit card. The bank of Canada opines that nearly everyone in Canada owns at least a debit card, making it one of the most popular cashless payment solutions in Canada.

With your debit MasterCard, Visa, or Interac, you can conveniently pay for goods and services at retailers. Debit cards allow you to make purchases at your favourite merchants by deducting money from your bank account without using cash for payments.

3.      Contactless Payments

You can now make cashless and contactless payments on your everyday purchases with just a tap of your contactless-enabled smart card or device.

A contactless smart card – debit and credit – comes with a wave-like or Wi-Fi symbol and uses a radio frequency identification (RFID) technology, also known as Chip.

You can make contactless payment by tapping the contactless chip card, wearable, or mobile-enabled device over a contactless payment terminal. It offers a convenient, touch-free, secure, and quick payment option.

4.      Mobile Payments and Wallets

Mobile payment lets you receive and send money through an electronic processing network using a mobile device, including a smartphone, Smartwatch, or tablet.

Mobile payments, including NFC mobile payments, QR payments, SMS, peer-to-peer, and more, enable users to make payments without cash or card. App-based mobile payments are rapidly gaining popularity among Canadians.

It offers the convenience of storing your credit card, debit card, or prepaid card information on your mobile device – mobile wallet. Some of the top mobile payment apps in Canada include:

5.      Bank Mobile App Payments

Apart from mobile payment options from tech companies, major Canadian banks also offer mobile payment solutions. These cashless solutions serve as a mobile wallet and provide an alternative to banknotes and bulky cash transactions.

Mobile banking apps enable users to transfer funds between accounts and perform other banking transactions from their mobile devices. Some of the mobile banking apps in Canada include:

  • RBC Launch
  • Scotiabank mobile wallet
  • CIBC mobile payment app
  • Tangerine mobile banking
  • BMO Mobile PayPass and BMO Mobile app
  • UGO Wallet
  • TD Wallet and TD mobile payment app

6.      Retailer Payment Apps

Retailer apps such as the Starbucks app, Uber app, etc., allow customers to make in-app purchases using their mobile device (Smartphone or tablet).

As a result, payment for goods or services within the app is made via the programmed payment sources saved on the app, including credit or debit cards, mobile wallets, prepaid cards, etc.

7.      Electronic Funds Transfer (EFTs)

Another excellent method of sending and receiving cashless payments is Electronic Funds Transfer (EFT). With EFT transactions, you can move or transfer money from one bank account to another either in the same bank or a different financial institution.

Canadians can also move money via Interac e-Transfers. All transactions are executed electronically without any cash handling. Electronic Funds Transfer include direct deposit, online banking payments and transfers, wire transfers, automated teller machines (ATMs), etc.

8.      POS Terminals

Point of sale (or point of service) terminal is a retail transaction method used by retailers and merchants to calculate a customer’s bill and the payment options available to the customer.

POS transactions can be done online or in-person; thus, the invoice and receipt can be generated electronically or printed. There are several PS systems and terminals for exciting transactions between merchants and customers to promote the cashless culture.

While there are POS machines for card-based payments, mobile-enabled POS apps and barcode scanners enable you to buy or sell goods and services anywhere.

9.      Cryptocurrency

Cryptocurrencies are digital currencies or assets that serve as a medium of exchange for cashless transactions. Cryptos are regarded as the future currency, gradually taking over the financial system due to their wide acceptance and popularity.

As a decentralized market, cryptocurrency is not backed or issued by any central authority. Apart from Bitcoin, which is the first and most popular crypto, several virtual currencies and wallets let you send and receive digital payments from anywhere worldwide. These include:

10.    Prepaid Cards

Prepaid cards work similarly to debit and credit cards. You can use prepaid cards for payment of goods and services, as well as cash withdrawals from ATMs.

Unlike debit and credit cards, prepaid cards have no allegiance to any financial institution, as they can be purchased from any merchant. As a cashless payment method, prepaid cards provide Canadians with purchasing power for cost-effective and convenient online and in-store purchases. They are available in reloadable and non-reloadable formats. Examples include:

  • CIBC Smart prepaid visa
  • HomeTrust secured prepaid visa card
  • KOHO prepaid visa reloadable card, etc.

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Kareena Maya

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.