Visa push­ing for busi­nesses to go cash­less

The Denver Post - - BUSINESS - By Erin Dou­glas

For years, mom-and-pop shops and food trucks alike have shud­dered at the ex­pense of credit card trans­ac­tions. It’s not un­com­mon, for ex­am­ple, for small busi­nesses to have min­i­mum dol­lar amounts for card pur­chases. Some still don’t ac­cept them at all or gently in­form cus­tomers they pre­fer cash.

Credit-card be­he­moth Visa launched a cam­paign to change that Wed­nes­day.

The cam­paign to go cash­less — or the Visa Cash­less Chal­lenge — aims to cre­ate a cul­ture in which cash is no longer king, Visa said.

As con­sumers in­creas­ingly de­mand ease and se­cu­rity in their shop­ping, cash-only busi­nesses face chal­lenges as dig­i­tal pay­ments be­come the con­sumer’s choice. And, ac­cord­ing to a Visacon­ducted study, it might be­come prof­itable. Ac­cord­ing to the re­port, busi­nesses in New York City could save more than 186 mil­lion hours in la­bor and gen­er­ate an ad­di­tional $6.8 bil­lion in rev­enue by go­ing cash­less.

But small busi­nesses re­main skep­ti­cal. “The good thing about cash is that there’s no mer­chant fee,” said Jimmy Fixari, owner of Turn In BBQ , a food truck some­times lo­cated in Civic Cen­ter park that has a $5 credit card min­i­mum. “If we could do any­thing, we would do card­less, but we try to be as flex­i­ble as we can.”

Fixari takes cards through Square and pays the com­pany a 3 per­cent fee per trans­ac­tion, he said.

Cards don’t ap­pear to be go­ing away any­time soon. Ac­cord­ing to the Fed­eral Re­serve’s pay­ments study in 2016, the num­ber of non­cash pay­ments in­creased at an an­nual rate of 5.3 per­cent from 2012 to 2015.

Busi­ness own­ers rec­og­nize the trend, but the costs pre­vent them from ad­vo­cat­ing on be­half of a more con­ve­nient and pop­u­lar op­tion for their cus­tomers.

Fixari, who says 60 to 70 per­cent of his trans­ac­tions are with a card, says he would not be in busi­ness with­out such pay­ment.

Sim­i­larly, Matt Cherry, owner of the Pasty Repub­lic’s Pasty Bus, a Denver restau­rant and food truck, es­ti­mated that of his younger mil­len­nial cus­tomers, 90 per­cent use a credit card to pay.

Ac­cord­ing to a U.S. con­sumer study by TSYS, a credit card com­pany, only 5 per­cent of peo­ple ages 25-34 pre­fer cash over credit or debit card in 2016. By con­trast, 17 per­cent of peo­ple ages 55-64 pre­fer cash.

Visa, a global pay­ments tech­nol­ogy com­pany, is try­ing to com­bat the anti-plas­tic tac­tics by small busi­nesses with mon­e­tary re­sources.

The cor­po­ra­tion plans to give $10,000 to as many as 50 small-busi­ness food-ser­vice own­ers who com­mit to the cam­paign to be­come cash­less.

The cam­paign in­cludes a “call to ac­tion” for small-busi­ness restau­rants, cafes and food truck own­ers to share what cash­less would mean for their em­ploy­ees and cus­tomers.

Visa’s study also found that if busi­nesses in 100 cities switched to all-dig­i­tal pay­ments, th­ese cities could net $312 bil­lion in ben­e­fits per year.

By 2020, Busi­ness Insider es­ti­mates in-store mo­bile pay­ment vol­ume to grow to $503 bil­lion — nearly seven times what it was in 2015.

Al­though Cherry ad­mit­ted that credit card trans­ac­tions have some ben­e­fits — like deal­ing with Square, which al­lows him to get loans — he still prefers cash for his busi­ness.

“I’m able to bet­ter track my sales from a cash stand­point, and I just feel like it’s eas­ier for me to get a hold on costs,” Cherry said, who also men­tioned tips as a ben­e­fit to cash trans­ac­tions. “Among the younger peo­ple, plas­tic is def­i­nitely more preva­lent.”

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