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Creditfix LB 03-2017

Visa Declares War on Cash

Card giant Visa is planning to up the stakes in the battle against cash by paying retail outlets to stop accepting cash payments.

The credit and debit card company has claimed that preventing retail cash payments would make transactions more secure. However, consumer groups are dubious of the motives behind the plan.

The change from cash payments to electronic such as credit and debit cards or phone payments like Apple Pay would obviously be of huge benefit to Visa, which make revenue from transaction fees.

The cashless plan is already on trial in the USA, where Visa are paying an incentive payment of $10,000 (?8,800) to retailers who are prepared to update their payment terminals and go cash free, and Visa are looking to expand the initiative to the UK.

Visa’s head of global merchant solutions, Jack Forestell, said: ‘We very much hope to bring a similar initiative to the UK in the near future. The UK is a bit further ahead than the US in terms of contactless use and cashlessness, so the initiative may look different but watch this space.’

Consumer groups have spoken out against the plan, claiming that it would put many consumers who rely on cash and cheques, including the elderly, at a real disadvantage.

Consumer company Which? stated that cash is still widely used by many and said: ‘Businesses should be led by how their customers want to pay, and not by the incentives offered by card firms.’

The Federation for Small Businesses (FSB) agreed and claimed that the plan would make things difficult for tourists using cash, and also be impractical in rural areas where slow broadband speeds would make transactions cumbersome.

Chairman Mike Cherry commented: ‘The vast majority of our members recognise the importance of offering cashless payment options. However, many have high volumes of customers that still want to pay in cash.’

A spokesman for Visa commented on the plan to offer 50 small businesses in the US $10,000 in ‘incentive funding’, and added: ‘We hope to offer a similar challenge to those merchants who are interested in other countries, including the UK. At this time, we do not have a firm plan on when such an initiative would be available in the UK.’

However, the government confirmed that it remains committed to cash. A treasury spokesman said: ‘The UK leads the way in financial technology such as contactless and digital payments. It’s important that consumers have choice in how to pay for goods and services, and paying cash remains a legitimate and useful way to pay.’

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