Convenience of going cashless comes at a cost to privacy: report
The convenience of cashless shopping comes with privacy costs, according to a new study from Dalhousie University’s Agri-Food Analytics Lab
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Cash was an early casualty of the pandemic. Shrouded in fear of contagion with buffets and free food samples, experts recommended avoiding it. Instead, contactless payments like credit and debit cards and digital wallets quickly became the norm. Some companies have even enacted a no-cash policy (which, contrary to popular belief, is their purview).
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But now, thanks to research, we know that cash is unlikely to pose a risk of transmitting COVID-19. Other pandemic habits, including unnecessarily bathing food, have taken a back seat, but contactless digital payment at the grocery store is still going strong, a new study from Dalhousie University’s Agri-Food Analytics Lab (AAL) suggests.
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More than 90 percent of Canadians use some form of electronic payment to buy their groceries; Credit and debit cards are the most popular. Convenience may come from crowding out cash at the checkout, the report says, but most people are concerned about privacy and how cashless grocery shopping could affect millions of Canadians who are unbanked or unbanked.
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Fifty-three percent of Canadians see a cashless economy as a threat to privacy, and several recent incidents show how real this threat is. A cybersecurity “event” in November 2022 will cost Sobeys $25 million, parent company Empire Co. Ltd said. in a report. Empire is still investigating whether customer information has been compromised. Meanwhile, Maple Leaf Foods was hit by a ransomware attack that same month, and experts say cybercrime is only getting worse.
Privacy issues also include unauthorized use of personal information by retailers. Across the retail industry, an investigation by privacy commissioner Philippe Dufresne found that Home Depot shared meta-details like email addresses and purchase information in-store without customers’ knowledge or consent.
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“People are starting to think differently about the cashless economy: maybe we’re a little more vulnerable than we think,” says Sylvain Charlebois, director of the AAL.
Going cashless is a compromise. Cash offers anonymity; Contactless transactions provide grocers with “valuable data”. As with other technologies, we balance privacy with ease of use, says Jenna Jacobson, an associate professor at Toronto Metropolitan University’s Ted Rogers School of Retail Management, who was not involved in the study.
“For many people, credit cards and debit cards are very common. This is by no means a new technology. Therefore, many people have a certain level of acceptance that in order to live in a modern society, we are constantly trading our private information for the benefits that technology can offer. The convenience of not walking around with cash. The benefit of maybe earning points on your credit card. The benefit of something being tracked so you can make a return easier.”
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The switch to contactless payment methods has gained momentum during the pandemic because it has been viewed as a public health issue, says Charlebois. People got used to the convenience and self-checkouts became more common, many of them only accepting digital payment methods.
According to the report, 26 percent of Canadian grocery stores will no longer accept cash in five years. And you don’t have to look far to see what the cashless future looks like – it’s already here. The cashless, cashless, 24-hour grocery store Aisle 24, for example, has locations throughout Ontario and Quebec.
“A lot of people see this as the end of the road when it comes to cash,” says Charlebois.
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Janet Music, AAL Research Program Coordinator, adds: “I think there needs to be a little more accountability to make people feel comfortable now because we are going to be in a crisis. On the one hand you cannot use cash, and on the other hand you are exposing yourself to a privacy risk.”
The report reveals Canadians are also concerned about how cashless grocery stores could impact access. Almost three out of four think they discriminate against people who have no or no bank details.
An estimated six percent of Canadian households (1.5 million) were unbanked in 2022, according to the Financial Consumer Agency of Canada. Fifteen percent were underserved; Households with a bank account that rely on alternative financial services such as payday loans.
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The report shows that an average of six percent of Canadians pay for their groceries with cash only, with the highest percentages reported in Manitoba (13 percent) and Atlantic Canada (11 percent).
Grocery stores are fundamental to our daily lives, says Jacobson. An increasingly cashless society means some people are left out. “Everyone needs food. For example, while some boutique coffee shops may make the decision to say, “We only accept credit or debit cards” when a grocery store does, well, there will be certain demographics that will be excluded from this type of interaction.”
As grocery prices continue to rise, Music took note of the report’s findings on the number of Canadians using credit cards to pay for groceries. In British Columbia (58 percent), Quebec (53 percent), Ontario (50 percent) and Alberta (48 percent), credit overtook direct debit as the most popular payment method. “We know the prices are inflated. But if you’re adding interest because you don’t pay off your card every month, you’re paying far too much for food.”
