Throughout
the history of this blog, I have written several postings on the concept of a
cashless society and the forces behind this move. A recent move by one of
the big players in the field suggests that Corporate America is willing to
financially reward merchants for making moves toward global digital payments.
Here's the press release dated July 12,
2017:
Here is
a screen capture from the United States Visa website, announcing "The Visa
Cashless Challenge":
In its drive to rid the world of those dirty fiat currency notes, Visa's Cashless Challenge will see the company awarding up to $500,000 to 50 eligible U.S.-based small business food service owners who commit to joining the challenge.
Visa
states that there are three advantages to small business restaurants, cafes and
food trucks adopting a cashless model:
1.)
safer business
2.)
boosted productivity
3.)
more time to mentor employees
The company also states that if businesses in 100 cities transitioned from cash to digital, their cities would see net financial benefits of $312 billion annually. New York City alone would see their businesses generate an additional $6.8 billion in revenue and save more than 186 million hours in labor by using digital payments. Now that has got to be tempting!
Visa
even offers some motivating stories about the advantages of cashless
businesses:
Here's one
showing how Lucas Mast, Visa's Vice President of Social Media made his way
through Barcelona for an afternoon without using cash:
Here's one showing how a Visa representative
in India, Abhishant Pant, managed to survive for 200 days without using cash:
Over
the 200 days he:
1.) Paid for all forms
of transport digitally, including auto (Jugnoo, OLA, ONGO), taxi (UBER/OLA/Taxi
for Sure), Mumbai Local (unreserved ticket), NMMT Bus, Hirkani Bus (Pune to
Mumbai) and Kaali Peeli (regular black and yellow cabs).
2.) Identified a barber who accepted digital payments.
3.) Dealt with poor service, including having to walk 8 kilometers back
to the office when my mobile was switched off.
4.) Convinced my maid’s entire family that I will pay her salary—just
that the money will go directly into her bank account rather than in cash.
5.) Pre-paid my
laundry, vegetable delivery and newspaper vendors to prove that I mean business.
6.) Had long
conversations with neighborhood Kirana stores (mom-and-pop neighborhood grocery
stores) on the benefits and challenges of cashlessness.
He
concludes that "anyone can go 95 percent cashless". His biggest
failure was having to use street vendors that only accept cash.
According
to Visa's annual report for 2016, the company had
the following operational highlights compared to 2014 and 2015:
The
company had over 3.1 billion payment accounts to 44 million merchant locations
globally and precessed total payments of $8.2 trillion and 83 billion payment
transactions for the 12 months ending September 30, 2016. The company has
the following goals:
Over
the past two years, Visa has provided payment accounts to more than 120 million
people who did not have access to such programs. Visa even has a Payroll
card which it uses as an alternative to receiving paper paycheques. This
reduces the need for cheque cashing services and provides access to the
companies electronic financial system.
Here
is a summary look at the company's 2016 revenue:
...and,
as I am prone to do and just in case you were curious, here's the bottom line that matters to the
corner office dwellers (noting that Mr. Scharf left his job on December 1,
2016):
Obviously,
it is in Visa's best interest to prod the restaurant business into a cashless
model. By doing this, Visa and its credit card peers are able to charge
merchant fees for each transaction. The potential for the abuse of
cashlessness, particularly the threat to privacy, seems not to concern the
promoters of the digital payments world in any form. After all, these are
the companies that will benefit hugely from the end of paper money.
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