The Visa Cashless Challenge is on. Visa is trying to convince small restaurants, cafes as well as food trucks to stop taking cash, forcing the customer to uses digital payments, credit cards or debit cards to pay for their purchase.
The credit card processing company wrote in one of its press releases that Visa was awarding as much as $500,000 to 50 small U.S. based business that are food service and commit to joining their 100% cashless quest.
If restaurants opt in, they will be given a gift of $10,000 by Visa to help pay for upgrades in technology, said the company. These upgrades would mean the installation of platforms that accept payments from smartwatches, smartphones, and other mobile electronic devices.
However, those fees can cut into margins painfully for any small sized business and could even mean a profit or loss for a small shop.
In a report from three years ago due by the Small Business Administration said that fees for transactions involving credit or debit cards can cost companies as much as 5% of their overall revenue.
Visa says it has proof that eliminating cash will help the small business owner. The company announced that it had conducted a study which found that if restaurants in cities around the U.S. stopped taking cash, they would bring in billions annually.
Just in New York City, Visa said that the study indicated businesses would be able to generate another $6.8 billion of revenue and save over 185 million hours in labor costs.
However, Visa has yet to release that report. When it was asked if it would be expanding its cashless push for small restaurants and related businesses, Visa’s Jack Forestell the head of merchant solutions said the current program was part of a strategy and group of initiatives that was much broader.
Forestell said that Visa was betting that restaurant goers would want to pay with credit cards as would others so they did not have to be worried about carrying cash.
Both the National Restaurant Association and the National Federation of Independent Business were requested to make comments relative to this cashless push but to date have not done do.