Visa Pitch Asks Businesses to Go Cashless

Visa Pitch Asks Businesses to Go Cashless

Home » FinTech » Visa Pitch Asks Businesses to Go Cashless

Visa Pitch Asks Businesses to Go Cashless

In recent years use of mobile payments has steadily increased while still falling short of what one might call widespread adoption. Meanwhile credit and debit cards are the clear favorite for consumers, being utilized in nearly half of all transactions completed by U.S. adults. Despite that, good old cash still accounts for around one-third of all transactions — and that’s what Visa wants to change.

As Wall Street Journal reports Visa is launching a new initiative that aims at converting small food vendors into cash-free operations. The company is selecting businesses and offering them nearly $10,000, which will go to various tech upgrades to improve card acceptance infrastructure and institute mobile payment options. To hold up their end of the deal, retailers must eliminate the acceptance of cash at their establishment. Visa plans on extending this deal to 50 businesses that it will select via an application process. It should also be noted that online-only businesses are not eligible.

Speaking about the initiative, Visa exec Jack Forestell told WSJ, “We’re really viewing this as the opening salvo.” He added that he say this as a step on the “journey to cashless.” Lest there be any confusion about Visa’s intentions, CEO Al Kelly told recently told investors “We’re focused on putting cash out of business.”

On the surface, Visa’s offer seems like a win-win. However some business owners might wonder how ditching cash will go over with their customer base. To that note Michael Ryan, co-owner and co-founder of New York’s 2nd City, says his cashless restaurant has experienced little resistance from customers. He also estimates that his staff and managers save as many as 23 hours of labor per week by not having to rectify cash drawers or drop off deposits.

Of course, beside annoyed customers, there are some other disadvantages to dealing strictly in credit cards and mobile payments. At the top of the list (and clearly a factor in Visa’s desire to overthrow cash) are credit card fees. According to WSJ, the average business owner pays 2% in credit card fees for every transaction. Additionally, there’s always the chance that a power or internet outage could knock out a vendor’s ability to process transactions beside cash, which may concern some owners. Finally another potential problem cashless vendors face should the movement catch on is the threat of legal action as cash is still legal tender. These downsides led National Retail Foundation SVP Mallory Duncan to declare, “The idea that merchants don’t want to accept cash is a myth.” 

So, with initiatives like this, can Visa actually lead us toward a cashless future? That remains to be seen and there’s a lot of skepticism to go around. In fact the site Naked Capitalism speculates that Visa could struggle to even attract 50 vendors to take them up on their offer. In the end, it seems even with mobile and other FinTech payment options growing in popularity, it will be a long while before cash is truly out.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Bank of America Brings Small Business Lending to Mobile

When's the last time you went to a physical bank branch? Chances are it's been awhile as mobile banking apps continue to gain both popularity and functionality. In addition to being a major convenience for customers, such apps have also been proven to save institutions a significant amount of money...

3 Ways to Take Advantage of Your New, Higher Credit Score

As your credit improves, taking advantage of refinancing or obtaining a rewards credit card can save you a fair amount of money. Furthermore, by keeping up with good credit habits and continuing to build your score, you may be eligible for even more perks along the way. So what now? Why not head over to a free credit monitoring site and see what shape you score is in today.

Is Amazon Prime Worth It? What You Get for Your Money

Prospective members should be aware that the beloved two-day shipping does not apply to every item on the site and that Prime's entertainment offerings might not be enough to satisfy everyone's TV craving. However, with a free 30 day trial and a monthly payment option after that, there's really no harm in taking Amazon Prime on a test run — especially on Prime Day — to see how it works for you.