Visa unveils new incentive plan to push cashless transactions (V)

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July 13, 2017 4:48 PM

Visa announced a new initiative called the Cashless Challenge, which, beginning in August, will incentivize small merchants to move away from cash

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Visa announced a new initiative called the Cashless Challenge, which, beginning in August, will incentivize small merchants to move away from cash and toward card- and mobile-based payments, according to the Wall Street Journal.

Visa will use an application-based process to select 50 small merchants in food services that will receive roughly $10,000 to upgrade their payment infrastructure to accept card- and mobile-based payments. In exchange, these merchants must pledge to limit or remove cash payments.

Such a move doubles down on the idea that Visa sees cash as its biggest competitor. Visa is securely the leader of the US card payments market — the firm processed 59% of transaction volume last year, more than double that of MasterCard. But cash usage, which accounted for 32% of transactions in 2015, isn’t going anywhere. It grew worldwide in 2016, according to Visa, and though it’s not as large as card usage in the US, it’s substantial enough that it’s pulling considerable potential volume from Visa. That’s leading the firm to target cash-heavy sectors, and find ways to disrupt them with its offerings.

Small businesses (SMBs) could be a linchpin in that strategy.

It’s likely that SMBs have lower credit penetration than larger sellers.
That makes them a key target for firms like Visa.

Ayoub Aouad, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on payments disruption that:

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