Cash or card in Canada: Which is the best way to pay?

Do you have a trip to Canada coming up? You’re probably already busy planning your itinerary and working out a travel budget. Regardless of how much you plan to spend, it’s important to understand the financial habits of people in Canada compared to those in the UK.

Canadians don’t use cash frequently and cards are the most popular option when paying. However, cash is still commonly accepted and some people prefer the more traditional payment methods. Since it can be tricky to decide what you should rely on during your trip, we’re here to help. We’ll dive into the details to answer the question - is it better to use cash or card in Canada?

We’ll also show you a cost-effective way to manage your spending in Canada. For any international purchases, whether online or in person, you can rely on the Wise card. You can even withdraw cash like a local for low fees* at the mid-market exchange rate.

How cash-centric is Canada?¹

Canada hasn’t been cash-centric for a while. The Canadian locals mostly use cards for paying, particularly credit cards. At the moment, around 50% of POS payments are made with credit cards.

Cash is only used in 6% of cases and predictions show that this number will decrease in the following years. However, the popularity of digital wallets is on the rise and it’s expected that they will be almost as popular as cards by 2027. On average, around 12% of POS payments in Canada are made with e-wallets.

Cash etiquette in Canada²

Tipping is prevalent in Canada, so much so that it is expected. This has become common since workers in the service industry often rely on tips. People usually leave some extra money in restaurants and bars, but also in hotels and taxis.

If you’re happy with the service in a restaurant or a bar, the general guideline is to tip around 15-20%. It’s also not uncommon to leave a small amount in the tip jar when at a self-service cafe. However, if you ever feel like the service you received is exceptional, feel free to leave more than the minimum amount.

Cash or card in Canada - the comparison

We’ve listed some situations where you’ll be paying for things in Canada. Here’s whether you’ll be able to pay by card, in cash or both:

Paying for…	Card	Cash
Taxis³	Usually, yes	Yes
Convenience stores	Usually, yes	Yes
Public transport⁴	Usually, yes	Yes
Restaurants	Usually, yes	Yes
Niagara falls tour⁵	Usually, yes	Sometimes, check with the tour operator

Using your card in Canada at an ATM⁶

There are over 60,000 ATMs in Canada and around a third of them are bank-owned. It won’t be hard to find one, since they can be found in both big cities and smaller towns. You should look in shopping malls, main streets, town squares and, of course, banks.

The withdrawal limits at Canadian ATMs vary based on account type, history and other circumstances. You can typically expect between 200 and 1,000 CAD per day. Make sure you check this with the bank operating the ATM you're using.⁷

Will my UK debit card work in Canada?

Yes, you’ll definitely be able to use your UK debit card in Canada. However, keep in mind that some additional fees may apply for using your card abroad.

Can I use my UK credit card in Canada?

Yes, your UK-issued credit card will work in Canada.

Reasons to use cash in Canada

Relying on cash on your trip to Canada can be a good way to save money. Since you can only spend what you have on you at the moment, you won’t be as tempted to splurge or buy something you’ll regret.

Also, tipping in cash is the best way to go. This ensures that your server will receive the tip and that it will be given to them directly.

Besides this, there aren’t many advantages to using cash in Canada. Different sorts of cashless payments are becoming prevalent, so only relying on cash isn’t the most convenient option.

Reasons to use credit or debit cards in Canada

Cards are the preferred payment method of Canadian locals. Not only are they the easiest and most convenient option, theyThe main reasons to use cards during your trip to Canada are safety and convenience. Carrying large amounts of cash when travelling makes you an easy target for pickpockets, so it’s a good idea to have your cards with you instead. Also, if you use your card to pay, you won’t have to deal with bringing spare ringgit back home.

Are contactless card payments common in Canada?⁸

Contactless payments are very common in Canada. Around 68% of all in-store payments are made with the tap-to-pay method and this number increases by around 20% each year. This is made possible by multiple factors. The first is the fact that almost all debit and credit cards in Canada have this feature, while the second is the increase of contactless payment terminals among merchants.

Contactless mobile payments are also on the rise in Canada. They make up more than 20% of all tap-to-pay transactions, but cards are still more popular.

The contactless limit in Canada is 250 CAD, after which you’ll need to enter your PIN.

Your Wise card can also be used for contactless payments in Canada. If you don’t want to carry cards with you, you can get the Wise virtual card with the same features.

Check out the latest GBP to CAD conversion rates below:

Other payment methods in Canada

Besides traditional credit and debit cards, other payment methods are also available in Canada.

Mobile payment⁹

The commonly used digital payment apps in Canada are also the ones that are the most popular globally. This includes Apple Pay, Google Wallet and PayPal, as well as Samsung Pay. However, Samsung Pay isn’t supported by all Canadian banks and bank unions.

There are also some options made exclusively for smartwatch users, such as Fitbit Pay or Garmin Pay. If you plan on using any of these apps during your trip, make sure you update them before you leave to avoid any issues.

For an additional layer of security, you could add your Wise virtual card to your wallet. It has all the benefits of a regular Wise card, but it exists in your phone only. You can freeze your Wise virtual card after every transaction, so top-notch security is guaranteed.

Buy now pay later options (BNPL)¹⁰

BNPL services are becoming increasingly popular in Canada, especially among Gen Z and millennial consumers. The biggest BNPL names are Sezzle, AfterPay, Klarna and PayBright. They all allow users to divide their purchase in four instalments.

There are also some banks that offer BNPL services. Some examples are American Express Plan IT™, CIBC Pace It and MBNA Payment Plans.

What is the best way to pay in Canada: cash or card?

In case you’re still having doubts about using cash or card in Canada, the answer is certainly cards. It’s up to you whether you prefer to use them in physical or virtual form, but they’re the best option. Canada is expected to become even more digital in the near future, so carrying large amounts of cash isn’t necessary. The important thing to remember before travelling is checking the expiration dates on your cards and making sure your digital wallet apps are up-to-date.

However, if you like having some cash on you or even keeping foreign currency as a souvenir, you could withdraw a small amount of Canadian dollars. Cards can be your primary payment method, while you could use cash for tips.

Spend like a local in Canada with the Wise card

Want to spend like a local in Canada without worrying about exchange rates and hidden fees? The Wise card might be just the option you were looking for.

You can use your Wise card for international payments, from your accommodation costs to daily expenses. It automatically converts your pounds at the mid-market exchange rate with only a small, transparent currency conversion fee*.

You can also use it to easily withdraw cash from the ATMs in Canada. Each month, you can make 2 withdrawals of up to 200 GBP for free. After that, there is a charge of 0.5 GBP per withdrawal. There’s also a 1.75% fee on any amount you withdraw above 200 GBP.

Spend like a local with Wise

Cash or card in Canada - FAQs

Here are some of the most frequent questions about using cash or cards in Canada:

Do you tip in Canada?

Yes, it’s customary to tip in Canada.

How cashless is Canada?

Canada is very cashless, since cash is used in around 6% of cases.

How much spending money do you need for 2 weeks in Canada?

That largely depends on your spending habits and travel style. However, you can always withdraw more money if you end up needing it.

Can I use contactless in Canada?

Yes, you can tap to pay while travelling through Canada.

---

Sources used:

1. Statista - POS payment methods in Canada
2. Canoo - tipping in Canada
3. Yellow Cab Victoria - paying by card in taxis
4. TTC - paying your fare by card
5. Niagara Falls Tour - tour payment methods
6. CBA - the ATM market in Canada
7. Money Genius - ATM withdrawal limit in Canada
8. Payments Cards & Mobile - contactless transactions in Canada
9. Finder - digital wallets in Canada
10. Ratehub.ca - BNPL in Canada

Sources last checked on date: 25-Oct-2024