A substantial majority of payments in the U.S. and Canada are non-cash, placing the two countries close to being cashless, MasterCard reported Sept. 23.
About 80% of the value of consumer spending in U.S. is made with non-cash payments, as is about 90% of the value of payments in Canada. These percentages place the U.S. and Canada at a "tipping point" in the path toward a cashless society, MasterCard said in "The Cashless Journey," a new report that examines 33 countries.
"The increased adoption of electronic payments has propelled Canada to leapfrog other countries and secure a top spot as nearly cashless. In other words, Canadians are comfortable with and prefer using other forms of payment and have been at it for years," said Betty K. DeVita, President of MasterCard Canada, in a Sept. 23 press release.
Other countries with high percentages of cashless payments include Belgium (93%), France (92%), the U.K. (89%), Australia (86%), Sweden (86%) and the Netherlands (85%). MasterCard chose Canada and Australia as early markets for its MasterPass digital wallet, partly based on the two countries' proclivity for adopting digital payments technology.
Emerging economies have lower cashless penetration, including India (32%), Russia (31%) and Nigeria (10%).
"What seems to be overlooked in the policy dialogue is that cash takes time to access, is riskier to carry, and costs a country up to 1.5 percent of its GDP. We can't expect the journey from cash toward electronic payments to be completed overnight, yet driven by technological advances and public-private partnerships this trend has gathered significant momentum over the past few years," said Peer Stein, Director of Access to Finance Advisory Services at the International Finance Corporation, in a press release.
The "Cashless Journey" report measures nations' progress toward more modern, efficient payment processes by looking at the current share of cash versus non-cash payments for consumers, how this share has shifted in the past five years, and whether conditions exist for cash payments to move to electronic alternatives.