Visa has launched an initiative aimed at pushing small businesses into upgrading the digital payment technology that they use. As an incentive 50 small businesses based in the United States that show commitment to embracing a cashless future will each receive $10,000 from the payments platform in the Cashless Challenge.
“We are declaring war on cash,” Andy Gerlt, a Visa spokesperson, said.
In order to take part in the Cashless Challenge food truck owners, cafes and small business restaurants will be required to say what cashless means to their customers, their employees as well as themselves. Small businesses that get the $10,000 can then use the money to upgrade their POS systems to ensure that they go completely cashless. The funds that remain after upgrading can be used for marketing or promotional activities of the business.
Visa revealed that the initiative will concentrate on food establishments and restaurants initially. Later the program is expected to be rolled out to more businesses, more industries and in more countries.
Though there has been a proliferation of debit and credit cards and new technologies such as Samsung Pay and Apple Pay, cash is still the dominant payment method not just in many sectors in the United States but also across the globe. This is because there are various hurdles standing in the way of going completely cashless such as upgrading the POS systems which small businesses might find expensive.
For Visa the Cashless Challenge is purely business as the adoption of cashless payments would be to its advantage since it is the biggest processor of debit and credit cards in the world and it earns fees from transactions that occur on its network. The higher the number of payments that occur on this network, the higher the revenue that Visa generates. But these fees are also another reason that small businesses still prefer cash payments. While many small businesses accept credit cards they still prefer being paid in cash.
According to Visa though, the benefits accruing from going cashless are significant. This is because handling cash also comes with its cost such as its physical transportation, the security risk of handling cash as well as more intensive bookkeeping. A study commissioned by Visa says that small businesses operating in the city of New York, for instance, could end up saving over 186 million hours wasted on labor associated with handling cash. And by going cashless they would generate extra revenues amounting to $6.8 billion.