Canadians still spending, but not using cash

When you buy something as simple as a coffee, you have several different ways to pay. Asthe options continue to grow, fewer people are choosing to spend cash.

Josh Crumbisco-founder of a new Canadian company called BitGold. It's aservicethat allows you to use gold as regular currency. By signingup to their service online, userspurchasegold which is stored in several vaults in cities around the world, and then use anaccount just like a bank account.

As Crumb explained in a promotional video, the companywill soon offer a debit card that will allow you to pay for things straightfrom your BitGold account.It's just one of the newest methods out there to spend your money.

But another one may be on the horizon too. Apple Pay, which allows users to pay for things through their iPhones, is reportedly coming toCanada this fall.Apple Pay allows you to load your credit cards or debit cards onto your phone and simply tap them on a scanner.

It seems that we are more than happy to embrace any method of payment these days other than cash.A recent Bank of Canada survey found for the first time ever,fewerthan half of our transactions are with cash.Financial author and personal debt guru Gail Vaz-Oxlade saidthat isn't necessarily something to be excited about.

"We have seen that psychologically there is a difference between using hard currency and using plastic, because the area of your brain that responds to purchasing that gives you the high of the buy happens regardless of how you spend.But the area of the brain that gives you the 'Oh,my cash just went away!' does not click on if you're using plastic," she explained.

Vaz-Oxlade saidwhen you don't see physical money disappearing out of your wallet, you can trick yourself into believing you're spending less than you are, which she sayscan lead to people going into debt. Vaz-Oxladesaysthat's wherewe need to focus our attention, as opposed to figuring out how many different ways we can use our cards.

"This whole thing about how we pay is so not as important as whether we are using our money to pay or not, regardless of the payment system we're using. And when we sort of become obsessed about the payment method we lose sight of the fact that the problems we have are not based on our payment method, they're based on the difference between using our money and using somebody else's."

That same Bank of Canada survey found that nearly a third of transactions now use a credit card,which is up significantly from five years earlier. That's a trendVaz-Oxlade expects to continue, which is why she says it's crucial that future generations are better educated on money.

"The reality is that the next generation of kids are probably going to use all kinds of different payment options, and cash is not going to be king. And if we're going to make sure our kids are able to deal with this, we have to teach them the difference between payment and credit."

That difference is increasingly blurred by new methods of payment.It's a shift that Josh Crumb of BitGold is hoping will be lucrative for his company.