Visa Considers Extending 'War on Cash' Business Incentives Outside US (cnbc.com)

Visa is hoping to extend its "war on cash" agenda to businesses in the U.K. after announcing new incentives for U.S. businesses to go cashless. From a report: The payment technology company revealed on Wednesday that it was launching a "cashless challenge" which would see 50 U.S. businesses receive $10,000 each to help them convert to a cashless payment model. It is now aiming to roll the model out to the U.K., though is yet to set a timeframe for the launch, a Visa spokesperson confirmed to CNBC Friday. Under the scheme, businesses in the U.S. are invited to submit plans outlining what going cashless might mean for them, their employees and their customers. Recipients of the award will then be required to use the lump sum to upgrade their point-of-sale systems so they are completely cashless. Any remaining money can be put towards marketing, the company said. "We're declaring a war on cash," Andy Gerlt, a spokesman for Visa, said in the announcement Wednesday.

Comments

The government let them do this in the first place

[Solandri]

Good luck getting the government to try to fix this - they're the ones which made it possible. Visa/Mastercard lobbied for and got laws passed which made it illegal for merchants to add a surcharge if you pay with a credit card, to help them recoup the credit card processing fee. (That's why you see some places advertising a cash discount - it's a loophole in the law.)

There would've been a lot more downward pressure on the 2% processing fee if merchants had been allowed to directly pass the fee on to customers. People would've preferred to pay with cash until credit card companies were able to lower the cost to something more reasonable, like a half or quarter percent. Card networks which had higher fees (e.g. Amex) would've had a tougher time than card networks with lower fees (e.g. Discover). But thanks to (corrupt) government regulation, competition to lower processing prices was eliminated, and we're all saddled with what's effectively a 2% sales tax to a private company. Even if you're paying with cash, you're paying the tax as the cash purchases basically subsidize the merchants fees for credit card purchases (since you pay the same amount for cash or credit in most stores).

And no the fee is not for protection against fraud. The merchant pays for fraud, not the credit card company. When you spot an unauthorized charge on you bill and request a chargeback, the card processing company issues a notice to the merchant asking for proof the purchase was valid. Usually this is the signature on the credit card receipt, but for online or automated transactions this can be things like the billing address or phone number (that's why gas station pumps ask you for your zip code). If the signature or other information the merchant submits doesn't match, the transaction is determined to be fraudulent, and the processing company simply deducts the amount of the charge from the merchant's payment. The merchant is out the money and the merchandise. The only expenses the card companies have to pay for are infrastructure, equipment, and staff. With the modern Internet and computers, this is probably on the order of pennies per transaction.

Re:The war on freedom and privacy.

[Anonymous Brave Guy]

Sure, companies are selling data about you and sure, they know everything you purchase and where and when you purchase it.

Part of the problem with the debate is when people say things like that. Perhaps you don't realise it, but what you wrote there simply isn't true.

For example, I have businesses, and we receive payments from people via various banks or online services or whatever. None of those financial services has any information about what those people were paying us for, only the details of the payment itself.

In most cases, financial services we deal with wanted to know something about what line of business we were in before agreeing to work with us. That means there is some genuine risk if you're talking about people buying something from a vendor known for supplying potentially sensitive or controversial products or service.

However, there's no magic database that tells anyone, even the card companies, exactly what you buy. The most extensive analysis is probably done by the big stores with their loyalty card programmes, and they really are looking at everything you purchase and doing all kinds of predictions about what might incentivize you to spend more with them in the future. However, participation in those programmes is typically optional, and the benefits tend to be so small that most people wouldn't really lose out if they just said no when they were offered a chance to sign up.

Keep the world weird

[darktwains]

So as a small business owner I should send 3 %ish (depending on various factors like card type cost per swipe etc) of my money to some large corporation probably headquartered in Ireland or the cayman islands. FYI I am not scared to carry cash. Best way to keep $ in my community. Declaring war on visa!

Re:The government let them do this in the first pl

[marvinglenn]

I believe that you are absolutely incorrect about there being a _law_ about not surcharging CC usage.

This issue was very much on my radar a couple of decades ago. There was a class action lawsuit against the biggest CC player about this. There was a blog that followed it, and while they dumped the custom domain, it appears that the content from the blog is here: https://waytoohigh.wordpress.c...

What it actually was... there was a _contract_term_ from your credit card processing bank that stipulated that you could not surcharge for CC. Some got around it by the cash discount, but eventually enough did that that they caught on to it, and forbid it by contract. And this was essentially a contract of adhesion, and every processor carried through the same restrictive terms. Didn't like the terms? Don't accept any of the big [four] CCs.

I was working at a very small retail merchant during that period, not even 'mom and pop', just 'pop'; and was very attuned to what it cost us. I remember seeing cease and desist letters from the CC company over our policy of not allowing CC payments for transactions Since the conclusion of the law suit, I've observed many more merchants declaring either a minimum transaction for a CC, or a processing fee on transactions under a threshold amount.