In this article, Rob Carrick explores the risk and benefits of three most popular methods of payment – namely cash, debit cards and credit cards – in Canada today. 

Getting Started

Appropriate Subject Area(s):

Personal finance, information technology, cyber-security

Key Questions to Explore:

  • What tasks do forensic accountants perform?
  • What are the pros and cons of making payments with the following methods of payment: credit card, debit card, cash?
  • Which method of payment is most popular in Canada today?
  • Why is the use of cash as a method of payment rapidly declining?

New Terminology:

Forensic accountant, mortgage fraud, fraud risk, skimming, POS (point of sale)


  • Forensic accountant: forensic accountants utilize their accounting, auditing and investigative skills to conduct an examination into a company’s financial statements or an individual’s personal finances. They use their expertise to determine whether criminal activities have occurred. Due to heightened awareness and growing intolerance of fraudulent activity, demand for forensic accountants is rapidly increasing.
  • Skimming is an electronic method of stealing personal information used by identity thieves. The skimmer is a small device that scans a credit card and stores the information contained in the magnetic strip. Note: It is safer to pay with the computer chip of a credit card than with the magnetic strip, because the computer chip creates a unique signature for each transaction. As a result, skimmers will be less likely to successfully steal your credit card data if you pay with the chip.

Materials needed:

A copy of the article

Study and Discussion Activity

Introduction to lesson and task:

How people make payments today

A recent report by Payment Canada shows that cash is still the most popular method of making payments in Canada (32%), in terms of number of transactions (volume).  It is closely followed by debit cards (25%) and credit cards (22%).

Interestingly enough, the total value of cash payments comes to only 1.30% of the total value of transactions conducted in 2015. This indicates that the average cash transaction size is very low.
The average cash transaction in 2015 was only $17.50.

Unsurprisingly, cheques and paper and electronic funds transfer (EFT) account for a large portion of total value of payment – a combined 89.2% of total value of payment – but just a small fraction of volume (16.6%). This is because people tend to write cheques or bank drafts for large, infrequent purchases like down payments for a house, car purchase, rent.

Method of Payment: Credit Cards vs. Debit Cards

  • Canadians use debit cards more frequently than credit cards. As Rob Carrick stated in the article, it is likely because of the convenience it provides. Funds are immediately removed from an individual’s account the moment the card is used. As a result, there are no subsequent bills or interest charges.
  • However, Canadians tend to use their credit cards to make large purchases like a television sets, furniture, etc. In 2015, more than 40% of Canadians used their credit cards for $1700 or more in purchases per month.
  • The average value of a credit card transaction was $107.79 and the average value of a debit card transaction was $42.58.
  • The popularity of credit cards over debit cards for large purchases can be explained by the rewards and relative safety they provide.

Benefits and Costs

  • Every method of payment has its own peculiar risk and benefit. However, Jennifer Fiddian-Green, a cyber-security expert, believes a credit card is the best method of payment. Some of the risks and benefits associated with the payment methods explored in the article are listed below:

Benefits Involved

Cash Debit Credit
No interest rate or fee attached Contactless Payment Contactless Payment
Immediacy of Payment No interest rate or fee attached Free Credit available for 30 days
  Immediacy of Payment  

Cost Involved

Cash Debit Credit
Easily lost Susceptible to fraud Susceptible to fraud
Could be stolen Longer reimbursement period High Interest rate
Low Limit to how amount on hand Not universally accepted
May incur additional fees at POS

Action (lesson plan and task):

  • Hand your students a copy of the article.
  • Ask them to state the method of payment they use most frequently.
  • Ask them to state the reason why they prefer this method to the other two options listed above.
  • Ask them to state the risks associated with the following methods of payment:
    • Debit
    • Credit
    • Cash
  • Ask them to state the benefits derived from paying with the following methods:
    • Debit
    • Credit
    • Cash
  • Ask them to state steps they take to ensure their credit cards or debit cards are not compromised.
  • Ask them to state some steps they take to protect the security of their online banking account.
  • Ask them to explain skimming.
  • Ask them to state some of the benefits of utilizing the Near Field Communication (NFC) phone payment or contactless payment. (I.e. avoid skimming).
  • Explain best practices on how your students can manage their cash, and protect their debit cards and credit cards from fraudulent activities.
  • Ask your students to state the conditions they most fulfill to qualify for the money back online banking security guarantee at most Canadian banks. (Sign out and close your browser at the end of each online banking session; keep password and personal verification questions and answers confidential; contact the bank immediately suspicious activity is recognized.)

Consolidation of Learning:

  • Ask your students to state what they will do if they notice an unauthorized transaction on their statement.
Success and Additional Learning

Success Criteria:

  • After completing this article, students should be aware of some best practices in safeguarding their banking accounts from fraudulent activities

Confirming Activity:

  • Ask students to explain why it is important to frequently review their bank statements.