I always carry a couple hundred in cash just in case, and it has come in handy. Over the summer I was waiting in line at the grocery store when their POS system decided to take a nap and stopped processing credit or debit transactions - cash only, said the cashier. This was a major Canadian grocery chain, not a mom and pop corner store. As far as I could see across several checkout lines, I was the only one with cash - everyone else had to queue up at the single ATM to withdraw money to pay for their purchases.
I get the privacy issues some people are raising here. But until the day when electronic payment systems are bullet-proof (probably long after I've shuffled off this mortal coil), I will continue to carry a wad of bills in my pocket.