Promoting the Cashless Economy: Visa’s $10K Offer Raises the Stakes for Restaurant Owners
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Restaurant owners might have been tempted by Visa’s recent offer of $10,000 to go cashless.
It could lead to quicker transaction times, reduce theft and bring in more valuable data — but going cashless comes at a high cost.
Sweden is on the path to becoming the world’s first cash-free society. Millions of Americans are already living without carrying much physical money around. The Federal Reserve Bank and Nilson Report data show just 30 percent of shoppers use cash in personal retail spending. Visa represents 59 percent of total purchase volume and is pushing hard toward a cashless economy.
Some people say our economy could benefit in a post-cash America; others raise fundamental questions about even the legality of denying the use of cash.
For restaurant owners thinking about it, here are some pros and cons to consider.
Pros: Forget About Cash
- Quicker transactions, increased productivity: One restaurateur told The Wall Street Journal that his managers are saving 23 hours of work each week without have to count cash, order change or go to a bank.
- Safety could get a boost — with no cash, there’s nothing to get taken by either an outsider or an employee.
- Data collection would skyrocket, allowing restaurants to create better incentive or reward plans and direct marketing.
- Restaurants could gain the potential to take more online orders.
Cons: Hold Onto It
- While about two-thirds of Americans have a bank account (and most of those have a debit card), the inverse is true: Almost a third do not have a bank account, let alone a debit or credit card.
- Visa and other credit card companies take 2 percent of a restaurant’s sales. And while Visa offered $10,000 to restaurants in its cashless promotion, it capped the number of “winners” at 50, meaning Visa breaks even on the deal at just $500,000.
- While theft of cold, hard cash could plummet, there could be an increased risk of credit card fraud.
- Using cash helps keep your transactions private, whereas use of credit cards can be tracked.
- Smaller vendors, which make up 50 percent of the industry, would be more heavily impacted.
Visa Takes Aim
In today’s cashless economy, purchases are made with credit and debit cards, as well as apps and wearable devices. The trend will continue. Visa CEO Al Kelly said, “We’re focused on putting cash out of business.”
Restaurant owners need to consider their own priorities and customers before taking any quick offers, even for $10,000.