BUSINESS

Visa To Pay Businesses To Stop Accepting Cash

"We're focused on putting cash out of business."

07/13/2017 16:35 EDT | Updated 07/14/2017 08:43 EDT
Jason Reed / Reuters
Visa credit cards are displayed in Washington on Oct. 27, 2009.

For obvious reasons, credit card company Visa wants the world to go cashless. But now it's launching a program that could help do just that.

The Visa Cashless Challenge, as it's called, will offer retailers across the U.S. $10,000 (C$12,700) to implement technologies for digital payments — but on condition the retailers stop accepting bills and coins.

In these locations, shoppers would be limited to paying digitally, either by credit or debit card, or by smartphone through apps like Apple Pay.

"With 70 per cent 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," Visa's head of merchant solutions, Jack Forestell, said in a statement.

Bloomberg via Getty Images
Visa CEO Al Kelly says his company is focused on "putting cash out of business."

Visa CEO Al Kelly puts it more bluntly.

"We're focused on putting cash out of business," he said at a Visa investor conference last month, as quoted at the Wall Street Journal.

Like other credit card companies, Visa charges retailers a percentage of the selling price for the convenience of using credit cards. An increase in the use of credit cards would increase the company's revenue, and could also mean retailers passing on the extra cost to consumers.

But Visa argues businesses would actually save money by going cashless. It cites a study it carried out, which found that businesses in New York City could generate an extra $6.8 billion (C$8.7 billion) in revenue annually and save more than 186 million hours in labour by eliminating cash.

Deborah Baic/Globe and Mail via The Canadian Press
Canada's Interac was an early pioneer of electronic payment systems.

Visa hasn't committed to bringing the program to Canada. Expansion outside the U.S. "will depend on individual market demand and interest," a Visa spokesperson told HuffPost Canada.

The company published a blog this week arguing that Canadians are already well positioned to go cashless.

"Canadians are among the most digitally attuned citizens in the world, enthusiastically embracing and adopting new technologies that make life easier and more accessible," the blog stated.

Canada was for years a leader in the switch to cashless payments, with its Interac debit-card system an early pioneer of digital payment. But in recent years it has been surpassed by other countries, including Sweden, which is on the verge of being cashless. Ninety-eight per cent of transactions in Sweden are carried out digitally.

By comparison, Canadians used cash for nearly half of all transactions as of 2015, according to research from the Bank of Canada.

A survey carried out earlier this year for Payments Canada found that 50 per cent of respondents are ready to get rid of banknotes and coins.

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