Digital payment company PayPal is not crying ouch over the news of the Canadian penny getting pinched.
“We think getting rid of the penny is good news for Canadian business,” said Nicky Mezo, head of marketing for PayPal Canada. “Cash is cumbersome and the penny is perhaps the most cumbersome of all.”
On Thursday, the Conservative government announced that the Royal Canadian Mint will stop distributing pennies to businesses later this year.
“The penny is a currency without any currency in Canada,” Finance Minister Jim Flaherty said Thursday. He said financial institutions face increasing costs in handling, storing and transporting pennies. It costs 1.6 Canadian cents to produce each one cent coin. Stamping out the penny will also save as much as $11 million a year.
There is no direct connection to digital payment, but PayPal appears to be taking the development well. “The businesses we work with have told us that they want to move towards digital and away from cash for many reasons but mainly because, increasingly, cash is not how customers want to pay,” said Mezo.
A survey commissioned by PayPal Canada last June showed that 56 per cent of Canadian are “comfortable” with never having to handle cash to make a purchase and many would prefer to use a digital wallet to give money to another person or to pay for items, said Mezo.
“Small businesses also don’t want the inconvenience of making change or rolling pennies to deposit in the bank,” she said.