Visa will pay restaurants $10,000 each to stop accepting cash

Saturday, July 15, 2017 by

Visa is offering 50 restaurants and food vendors $10,000 a pop, in addition to upgrading their payment technology. The catch: these businesses can no longer accept cash payments. Dubbed the “Visa Cashless Challenge”, this campaign is part of the credit card giant’s push towards a culture free of countable currency.

The $500,000 incentive has been called “the opening salvo” by Jack Forestell, global head of merchant solutions at Visa. According to FoxBusiness.com, the company will utilize an application-based process to select 50 small restaurants, food trucks, and cafes, excluding those that operate exclusively online to participate in their challenge. In exchange for their commitment to cashless transactions, these businesses will receive technological upgrades that will allow customers to pay with credit cards, debit cards, or their cellphones. They can use the $10,000 reward to cover their marketing costs.

Visa has gone on to state that embracing plastic would ultimately be more profitable. The company estimated that going cashless would net New York City-based businesses about $6.8 billion and revenue, and save them over 186 million hours in labor. Visa added that, if the businesses of 100 cities switched their payment methods, then these cities could earn $312 billion in benefits annually.

Though the “journey to cashless” program is set to launch in August, it’s already received a flurry of mixed reactions from business owners.

Michael Ryan, co-owner and co-founder of Filipino taqueria 2nd City, said that they haven’t dealt in cash payments since the restaurant opened to the public in 2016. Though the business has to pay card issuers, Ryan stated that the on-duty manager can save 23 hours a week by not having to count cash or order change.

Jimmy Fixari, owner of food truck Turn-In BBQ, is one of those business owners who is on the fence. Fixari told the DenverPost.com that he wouldn’t mind going totally cashless, especially since his food truck already has a $5 credit card minimum purchase requirement. However, Fixari has acknowledged that there are still some benefits to cash. “The good thing about cash is that there’s no merchant fee,” he stated, explaining that his business accepts credit card payments through Square and that the company is paid a three percent fee for every transaction.

Being able to monitor their expenses better is what has made Matt Cherry, owner of food truck Pasty Republic’s Pasty Bus, a resolute believer in paper money. “I’m able to better track my sales from a cash standpoint, and I just feel like it’s easier for me to get a hold on costs,” said Cherry.

Others see this campaign as Visa attempting to cut out its biggest competitor. The corporation has maintained its firm hold on the United States card payment market, accounting for 59 percent of purchase volume on credit and debit cards in 2016. This puts Visa leagues ahead of its rival Mastercard, whose number stands at just 25 percent.

Despite this, cash remains the most widely used payment method among Americans. In 2015, 32 percent of all consumer transactions were done with cash, while 27 percent were done with debit cards and 21 percent with credit cards. (Related: Don’t Pay For Groceries with Plastic! Credit Card Numbers Stolen From Grocery Store Chain)

In response, Visa has opted for more aggressive tactics. The credit card corporation just recently signed an agreement with the Polish government to steer the country towards a cashless system.

Will the same be happening in the United States? Only time will tell.

Visit Pensions.news for other stories about finance and money.

Sources include:

FoxBusiness.com

DenverPost.com




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