Shoe Leather Costs of Cash Withdrawals in Canada

The Bank of Canada wanted to understand the impact on cash withdrawals if people had to pay more to access cash. Staff working paper 202128 considers this question ¹.

When it comes to cash withdrawals, a key cost for economists is the time and effort needed to access cash. This component significantly exceeds that of transfer fees or other charges for cash withdrawals.

Although this area has been studied by others, the Bank set out identify those who did not have to ‘spend’ time and effort because they were passing bank branches and ATM equipment as part of their daily routine from those who had to make a special effort. They could then establish the impact of this time and effort on the demand for cash.