Visa is paying out a jackpot to vendors willing to bet against old money, and roll the dice on cashless transactions.
Visa will give $10,000 to 50 restaurants that pledge to go cashless. The new initiative, what Visa executive Jack Forestall calls “a journey to go cashless,” will incentivize vendors to rip off the bandaid of paper transactions and progress to a cashless system. The money can be used for marketing and updating point of sale technology to focus payment exclusively on credit and debit cards and electronic payment. Visa will select participating merchants in August.
Cash remains the predominate method of payment, according to the Federal Reserve. A report found that nearly a third of all transactions in the United States are with cash, but that fraction is gradually narrowing. The same report found that few Americans prefer cash over debit or credit cards — 70 percent of respondents said they prefer plastic over cash.
Emerging technology explains the growing appeal of ditching cash for consumers. Mobile apps like rapid!Access1 allow card holders to manage their account, deposit checks and review transactions from mobile devices. A central financial hub at your fingertips is impossible with cash — so are the perks of shopping online and remote payment. Card holders and electronic payment users recognize the advantages of living cashless.
Yet, vendors lag behind.
Part of merchant resistance to go cashless comes from skepticism of credit card interchange fees. On average, merchants pay 2 percent of a transaction to the banks that issue the cards. However, what many do not account for are subtle leaks in revenue that are exclusive to dealing with cash. Handling cash is not free either: someone is paid to transport cash to a bank, an employee has to count bills on the clock, there is an increased risk of theft when cash is stored onsite, etc. Going cashless has a discrete, identifiable cost in fees, whereas handling cash pickpockets merchants in ways that are not usually accounted for.
The move to cashless business has already begun. New York taqueria owner Michael Ryan has not accepted cash since he opened his business in 2016 — no safe, no drawers and no hassle of counting bills. Ryan estimates the general manager saves 23 hours a week by avoiding the headache of dealing with cash, according to a Fox Business article.
Cashless transactions are a break from the norm, and while growth is not always easy, it is oftentimes necessary. Steps toward cashless businesses, like Visa’s incentive program, are a spur for merchants to catch up to growing consumer demand for modern, plastic and electronic payment options. Going paperless saves merchants money, hassle and improves security. There are no secrets when cash is eliminated: no uneven drawers, no trips to the bank and no worries when going paperless.
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