Wednesday , December 11, 2019

Not So Fast, Visa: Cash is Still King, Says ATM Operators Trade Group

Visa Inc.’s “Cashless Challenge” campaign to promote electronic payments is not finding much support from the ATM industry, to put it mildly.

Consumers queue in a café to pay. (Image Credit: Revel)

Last week, Visa announced the campaign, which will award up to $500,000 to 50 eligible U.S. food-service owners who convert their point-of-sale systems to electronic payments only. Visa wants to create a “culture where cash is no longer king….” Visa has not yet revealed in detail how the challenge will operate. The National Restaurant Association estimates there are more than 1 million U.S. restaurant locations.

But now Visa’s gambit has sparked a sharp response from the global trade group ATMIA, which represents ATM operators and deployers. These members rely on consumers having ready access to their machines to withdraw cash.

“By paying these food-service owners to reduce their customers’ payment choices, Visa Inc. has elevated its commercial interests above the public interest in America,” Mike Lee, ATMIA chief executive, said in a press release. “This may seem to Visa like an offer that can’t be refused, but these money ‘rewards’ actually send out a message that the underlying business proposition must be unpalatable to both consumers and merchants when stripped of its $10,000 sweetener.” Visa did not respond to a request for comment on Lee’s statement.

ATMIA may have some cause for concern. Of five economies—Germany, the United Kingdom, the United States, France, and Israel—examined with respect to use of cash by consumers, 58% of U.S. consumers were likely to use cash for a purchase at least once a week, below that of Germany, 75%, the leader.

ATMIA says cash remains a universal payment method. Denying consumers the option of using it as a payment option discriminates against less-advantaged persons, Lee said. “Societies should cater to all their citizens, including the unbanked, underbanked, and the digitally disadvantaged,” he said. “Attempting to buy loyalty in this crude manner will never triumph over basic freedom of choice.”

All of the card brands have long promoted electronic payments over cash use. The number of U.S. credit and debit card payments totaled 103.3 billion in 2015, the latest year for data in the Federal Reserve Payments Study 2016. That’s an increase from 83.4 billion in 2012.

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