Understanding Changes to Access to Cash in Canada

The Bank of Canada has issued a Staff Discussion Paper that focuses on the retail side of the cash distribution system examining changes in cash accessibility as the result of the COVID-19 pandemic ¹. It found that 97% of Canadians had access to an Automatic Banknote Machine (ABM) and that this had not changed during the pandemic.

Cash usage has been falling for a while in Canada. In late 2020, 20% of transactions were in cash and 40% of low value transactions, those under $15, used cash.

One of the risks of lower volumes is a decline in the economies of scale leading to higher costs and in turn to a rationalisation of the cash infrastructure. Given that cash is in great demand in a crisis, and that once the network reduces it is hard to regenerate it, understanding changes to access to cash is important.