June 29 , 2010

New research reveals Canadians are reaching for their digital wallets

More than one-third of consumers are using cash, cheques less frequently

Canadians are finding themselves frustrated with cash and cheques and are opting to reach for their digital wallet instead, according to a new research study on the future of money.

When it comes to paying and getting paid, cash is no longer king. Canadians are rapidly adopting a digital currency, using a computer or mobile phone to conduct person-to-person transactions like splitting a restaurant bill or sharing costs. In fact, according to the research conducted by Leger Marketing on behalf of PayPal Canada, the number of Canadians who have sent money electronically nearly doubled in the last 12 months increasing from 28 to 50 per cent.

Why are Canadians going digital?

Three-quarters of Canadians indicate that they always want their money at their fingertips and the inconvenience of cash and cheques is leaving many of them frustrated. They’re starting to realize that using cash and cheques is not always free or easy, according to the Future of Money study, as many have found themselves incurring banking fees to withdraw money (80 per cent) or needing to write a cheque but unable to find their cheque book (51 per cent).

“We know that people often find themselves inconvenienced and frustrated when they don’t have any cash on hand,” said Nicky Mezo, PayPal Canada. “Instead of making an extra trip to the bank machine or pulling out a cheque book, Canadians are increasingly doing these transactions digitally to save time, reduce aggravation, and save money.”

How are Canadians dealing in digital dollars?

Canadians are increasingly accessing their dollars through a computer or mobile phone, according to the Future of Money study. The majority (62 per cent) of Canadians are transferring money online using their computer – whether it’s through an online payment service, like PayPal, or through their bank account – avoiding the costs or hassle associated with locating a bank machine or writing a cheque.

The study also reveals that Canadians are embracing their mobile phone as their digital wallet. Three-in-10 Canadians who use their mobile phone to transfer money say their use has increased over the past 5 years and one-in-five Canadians say, if they could, they would use their mobile phone to pay for everyday purchases from a retailer or to buy their morning coffee or lunch.

More than 4 million Canadians are already using PayPal services for paying and getting paid online, including:

• PayPal Send Money , which allows Canadians to send money to friends and family almost anywhere around the globe. Domestic transactions are free when funded from a PayPal balance or bank account.  
• The PayPal Send Money app, which is free to download andmakes it easy for Canadians to access their digital wallet on their smartphone. Apps are available for iPhone, BlackBerry, and Android handsets.
• Square Up with PayPal , a Facebook application that helps Canadians, who have organized a Facebook event, to split the cost with friends and keep track of what is owed.

The Future of Money study also reveals other interesting facts that are likely causing Canadians to reach for their digital wallet:

• Many Canadians can’t keep track of their cash with almost four-in-10 Canadians admitting that they never seem to have cash on hand and three-quarters opening their wallet to find that they didn’t have any cash.
• The majority of Canadians incurring banking fees when either withdrawing or transferring money are frustrated by this (82 and 74 per cent).
• More than half of Canadians don’t want to have to find a bank machine every time they need to pay someone back.
• Almost four-in-10 Canadians have lost a cheque that someone gave them and almost 50 per cent have forgotten about a cheque they wrote only to be surprised when it was cashed.
• One-in-four Canadians under the age of 35 say they never use cheques.
• Almost 70 per cent of Canadians have had to make a special trip to a bank machine to pay someone back and fifty per cent of Canadians have been late for a meeting or gathering because they had to stop at a bank machine.