In a bid to discourage users from paying cash to small businesses like restaurants, Visa be paying out $10,000 to 50 US based food service owners. In a press release, Visa said it “will be awarding up to $500,000 to 50 eligible US-based small business food service owners who commit to joining the 100% cashless quest” which means interested businesses in this category may start encouraging you to pay with your card the next time you make a stop at their outlets.
But Visa won’t be handing out cash to those businesses rather this would be in form of tech upgrades which would mean that instead of businesses having to invest in new technology that they say would save them money over time. According to the release, they cited a study which they quoted as saying that “in New York City alone, businesses could generate an additional $6.8 billion in revenue and save more than 186 million hours in labor, by making greater use of digital payments. This amounts to more than $5 billion annual costs savings for businesses in New York.”
The $10,000 worth of tech upgrades would easily help businesses transit to a more cost effective way of collecting which means while the number of mobile connections are set to hit 5 billion by 2020, it only makes sense for businesses to be prepared to start collecting payments from phones and smartwatches alike going forward.
This is all part of Visa’s cashless campaign globally because back in 2015, they started similar campaign in Nigeria where they were giving 1,000 Naira of free fuel to Visa card users who spent 3,000 Naira and above.
The Central Bank of Nigeria (CBN) is now aggressively pursuing its cashless policy too by placing charges on cash withdrawals above certain amounts in a bid to encourage users to do more internet banking instead while reducing the amount of cash in circulation (probably as a way of combatting inflation, let me leave that to the economists).
But Visa and other credit card companies take up 5 percent of a business’ revenue transaction processing costs which may be why some small businesses haven’t yet embraced the idea.
That said even though many are gradually getting more aware of the benefits of collecting cash using electronic means, it looks like we still prefer to hold cash as a people if you consider that at least 2 billion adults globally still don’t have access to basic bank services.