Pssst—restaurant owners—want a quick $10,000? Just stop accepting cash payments. This would be the intent of Visa’s current initiative that offers an incentive to selected merchants. According to the following article, Visa aims to take the offensive against cash transactions.
Visa has a new offer for small merchants: take thousands of dollars from the card giant to upgrade their payment technology. In return, the businesses must stop accepting cash. The company is announcing the initiative this week as part of a broader effort to steer Americans away from using old-fashioned paper money. Visa says it is planning to give $10,000 apiece to up to 50 restaurants and food vendors to pay for their technology and marketing costs, as long as the businesses pledge to start what Visa executive Jack Forestell calls a “journey to cashless.”
“We’re really viewing this as the opening salvo,” said Mr. Forestell, Visa’s global head of merchant solutions, of the potential total $500,000 commitment. Consumers at those stores would be able to pay for goods or services only with debit or credit cards or with their cellphones. 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 .
Visa will pick the participating merchants from an application process that starts in August. Online-only shops are excluded. Visa has long considered cash 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. Visa processes credit and debit card payments on behalf of banks and merchants. The company makes money when consumers use their Visa-branded cards. An increase in transactions and payments volume over its network typically results in rising revenues.
Cash isn’t going away anytime soon, but no doubt this is an ongoing trend. Some countries, such as Sweden, have taken ambitious steps toward a cashless society. Recently, India has used more drastic action by trying to rapidly eliminate some widely used currency bills. Visa’s effort takes a more incentivized approach, which so far is limited to just 50 restaurants. So call this a pilot study, and let’s see what the results turn out to be. A word for restaurant patrons—don’t bother stopping at the ATM for cash, but have your mobile pay app or plastic ready when the tab comes.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
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