Visa Inc. has announced a new initiative called The Visa Cashless Challenge, encouraging US small businesses to stop using cash by offering thousands of dollars in reward.
The Visa Cashless Challenge invites small US-based food service businesses such as restaurants, cafes or food truck owners to describe “what cashless means for them, their employees and customers”. If they commit to being 100% cashless, up to 50 of these eligible businesses will be awarded up to US $10,000.
Speaking of the Cashless Challenge, Jack Forestell, head of global merchant solutions, Visa, Inc. said:
“At Visa, we believe you can be everywhere you want to be, and that it should be easy to pay and be paid in more ways than ever – whether it’s a phone, card, wearable or other device. With 70% of the world, or more than 5 billion people, connected via mobile device by 2020, we have an incredible opportunity to educate merchants and consumers alike on the effectiveness of going cashless.”
According to Visa, a part of its strategy is to be “focused on putting cash out of business”, said at Visa Inc.’s 2017 Investor Day held in June this year. The company also said that one of their recent studies had found that cities could “stand to experience net benefits of $312 billion per year” if businesses transitioned from cash to digital. As an example, it said that businesses in New York City could generate an additional $6.8 billion in revenue and save more than 186 million hours in labour, just by switching to cashless payments.
Cash still is a popular payment choice for consumers in the US, accounting for around 30% of the market share according to a recent Nilson Report. Being able to break into the cash payments arena is clearly a big opportunity for Visa.
Read Visa’s press release.
A question of choice
It seems as though Visa is forgetting one important thing: people prefer to have choice. They prefer to make their own decisions based on what is convenient to them. Despite the increasing variety of cashless payment options available to the public, global cash demand is continuing to grow at reportedly 5%.
Many people are excluded from non-cash payments due to being unbanked, and this is not limited to poorer, third world countries. In the US, for example, it is estimated that around 26% of US households are either unbanked or underbanked, according to the FDIC.
If businesses stop offering cash payments, it would make life very difficult for those who are reliant on the availability of cash.
Simply put, people need choice.
Visa, Inc. 2017 Investor Day