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How Far Do Canadians Need to Travel to Access Cash?

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  • Heng Chen
  • Daneal O’Habib
  • Hongyu Xiao

Abstract

This paper develops a travel-based metric to measure Canadians’ access to cash from automated banking machines (ABMs) and financial institution branches. Our findings indicate that the average distance Canadians need to travel to reach the nearest ABM is 2.0 km, while the average distance to the nearest branch is 4.5 km. Moreover, more than 90% of Canadians live within 5 km of an ABM, and 84% live within 5 km of a branch. The total number of ABMs in Canada increased by 3.7% between 2019 and 2022, and our results show that, overall, access to cash remained stable in that period. However, the total number of branches decreased by 5.2%. The decline in branch coverage is concentrated in rural areas at 7.2%. This may increase the challenge of accessing cash in these regions. Rural Canadians already have less access to cash: they need to drive an average distance of 4.0 km to the nearest ABM and 9.6 km to the nearest branch, each distance twice the national average.

Suggested Citation

  • Heng Chen & Daneal O’Habib & Hongyu Xiao, 2023. "How Far Do Canadians Need to Travel to Access Cash?," Discussion Papers 2023-28, Bank of Canada.
    • Handle: RePEc:bca:bocadp:23-28
    DOI: 10.34989/sdp-2023-28
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    References listed on IDEAS

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    1. Jocelyn Donze & Isabelle Dubec, 2009. "Paying For Atm Usage: Good For Consumers, Bad For Banks?," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 583-612, September.
    2. Stijn Ferrari & Frank Verboven & Hans Degryse, 2010. "Investment and Usage of New Technologies: Evidence from a Shared ATM Network," American Economic Review, American Economic Association, vol. 100(3), pages 1046-1079, June.
    3. Walter Engert & Ben Fung, 2019. "Cashless Bank Branches in Canada," Staff Analytical Notes 2019-29, Bank of Canada.
    4. Magnac, Thierry, 2017. "ATM foreign fees and cash withdrawals," Journal of Banking & Finance, Elsevier, vol. 78(C), pages 117-129.
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    Cited by:

    1. Rösl, Gerhard & Seitz, Franz, 2024. "Resilience and the cash infrastructure: The role of access, acceptance, availability, and affordability," Weidener Diskussionspapiere 93, University of Applied Sciences Amberg-Weiden (OTH).

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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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