Credit card network Visa has an interesting proposal for small food businesses across the country. It will give as many as 50 of them $10,000 each to upgrade their systems, especially to accept contactless mobile payments. The catch is that they have to agree not to accept cash anymore.
Visa’s War on Cash is a thing
You may not have known this, but Visa has declared war on cash. That makes sense, since cash is its main competition as a network for credit and debit card payments. The $500,000 set aside to help merchants quit cash is just one front in this war.
The Wall Street Journal reports that the company’s new CEO, Al Kelly, has a particular interest in eradicating cash.
“We’re focused on putting cash out of business,” he told the company’s investors in June. Globally, payments by cash and check are actually increasing. Americans still use physical dollar bills in 32% of transactions, and Visa wants to change that.
The Pros & Cons Of Going Cashless
One small restaurant in New York City told the WSJ that its manager saves 23 hours each week worth of work by going all-cards. The main downside: having to pay transaction fees on all of the money that it takes in.
The National Retail Federation takes a pro-cash stance, noting that fees take an average 2% bite off the top of business, and the percentage goes up for merchants that are smaller. The trade group has also pointed out in the past that expenses related to taking cash — even the risk of robbery and theft — are still lower than credit card fees.
Ultimately, it’s customers who will decide which method of payment we prefer, and the percentage of payments made in cash is falling. 40% of consumer transactions were in cash in 2012, and that fell to 32% in 2015.
Notably, while Visa says that the $10,000 payments will help food vendors and restaurants with their payment systems and marketing costs, you don’t really hear anything about a discount on those interchange fees.
One way that these cashless restaurants could avoid both interchange fees and dealing with crumpled bills would be to accept blockchain currencies like bitcoin, assuming that interested customers have devices with bitcoin wallets in their pockets. Visa, however, is not going to help them set up for this. As far as we know, the payment network doesn’t have any cryptocurrency payment acceptance products in the works.
by Laura Northrup via Consumerist