Visa has announced a new a initiative in the United States as part of a broader effort to steer consumers away from using cash. The credit card company is planning to give away $500,000 to 50 restaurants and food vendors to pay for their technology and marketing costs, as long as the businesses pledge to refuse cash.
“To Visa, a cashless culture means convenience, security and ease of
use. That translates to freedom for consumers and merchants alike,” said
Forestell. But of course, that freedom excludes the use of cash.
Consumers at those stores would be prohibited from paying for goods or services in cash. In exchange, Visa is offering to pay for upgrades to merchants’ technology at the checkout line so that they can accept contactless payments, such as Apple Pay. The $10,000 incentive can also help cover some of the merchants’ marketing expenses.
Visa will select participating merchants from an application process that starts in August.
The credit card company has long considered cash as one of its biggest competitors and has been taking steps to chip away at it. Getting rid of cash is a priority for Visa Chief Executive Al Kelly, who took over late last year, especially as cash and check transactions continue to grow globally.
“We’re focused on putting cash out of business,” Mr. Kelly said at Visa’s 2017 investor day in June, adding that converting checks and cash to digital and electronic payments is the company’s “number-one growth lever.”
It seems however that Visa is challenging a formidable competitor. In 2015, US notes in circulation increased by 6.2% in value according the the Federal Reserve Annual Report.
The business case may also be difficult to demonstrate for restaurant owners. According to Federal Reserve Cash Product Office, 89% of the US population hold cash to some extent and 64.2% always hold cash. The cash averse group who are so often written about in articles describing the demise of cash only represent 9% of the US population. According to the Federal Deposit Insurance Corporation (FDIC), about 27% of Americans are unbanked.