No cash, no problem: Mad Radish founder says cashless transactions are here to stay

When it came to the decision to go cashless, Mad Radish owner David Segal's philosophy was simply to "take a leap of faith and do it."

"It's one of these things that five years from now, won't even be a topic of conversation," said Segal.

The founder of David's Tea has opened two Mad Radish locations — a restaurant that describes itself as focussing on the salad as the main course, and serving it fast — in Ottawa, his hometown.

Neither location takes cash, and signs on both the outside and inside doors give customers advance warning that cash is not king.

Segal says the experiment is going well so far, and expects it to catch on elsewhere.

"I think most of North America is ready for cashless," said Segal, noting that a debit or credit transaction only adds about two per cent to the cost of the sale.

There are other benefits to avoiding cash, he added, like having to get change when a cashier runs out of quarters in the middle of a busy lunch hour.

The security costs and concerns of handling paper money also outweigh its usefulness, said Segal.

Cashless transactions 'more efficient'

"Cash is slow, cash is expensive to handle and cash doesn't drive an efficient frictionless checkout experience," said Jeff Guthrie of Moneris, the largest processor of debit and credit transactions in Canada.

Moneris predicted that by 2030, 90 per cent of Canadians' business transactions will be electronic.

"It's more efficient for the merchant — you can serve more customers in a shorter period of time," said Guthrie, describing Ottawa as in the middle of the pack when it comes to how Canadian cities are shifting away from cash in consumer transactions.

Guthrie said ​"everyday spends," commonplace purchases like a cup of coffee or a sandwich, are the kinds of sales where an electronic payment system makes sense and doesn't jar the consumer.

A boutique shopping experience — like, say, buying a pair of high-end headphones — also makes sense for going cashless, said Guthrie, since the customer appreciates a "cool" transaction to match the caliber of their purchase.

Shift already underway

But the shift away from cash is happening in the hum-drum world of everyday shopping duties, too.

Earlier this year, Loblaws stores in Ottawa banned cash at the self-checkout aisle. The company said that prior to the change, only 15 per cent of those sales had been cash, anyhow.

"If customers are interested in paying by cash, our cashiers are happy to help," wrote Tammy Smitham, Loblaws Companies' vice-president of external communication, in an email.

At Mad Radish, Segal concedes one market segment overlooked by the cashless model is the 12-to-15-year-old demographic, the age at which many people do not yet have a credit or debit card.

For that group, Segal is working on a reloadable gift card.

But are there some places where there will always be cash transactions?

"I don't think so," said Segal, after some thought.

The widespread adoption of cashless payments will likely lead to the expansion of biometric pay systems and others we can't even imagine yet, he said.

"We just feel, overall, it's a much cleaner way of doing business."