After announcing new incentives for U.S. businesses to go cashless, Visa is hoping to extend its “war on cash” agenda to businesses in the U.K.
To help them convert to a cashless payment model, a “cashless challenge” which would see 50 U.S. businesses receive $10,000 each would be launched, the payment technology company has revealed recently.
A Visa spokesperson confirmed, though is yet to set a timeframe for the launch, it is now aiming to roll the model out to the U.K.
Outlining what going cashless might mean for them, their employees and their customers, businesses in the U.S. are invited to submit plans under the scheme.
In order to upgrade their point-of-sale systems so they are completely cashless, recipients of the award will then be required to use the lump sum. The company said that any remaining money can be put towards marketing.
“We’re declaring a war on cash,” Andy Gerlt, a spokesman for Visa, said in the announcement.
“We hope to offer a similar challenge to those merchants who are interested in other countries, including the U.K.,” a spokesperson told CNBC in a separate email Friday.
“At this time, we do not have a firm plan on when such an initiative would be available in the U.K.”
Since Visa, the world’s largest processor of credit and debit cards, takes a fee from every payment that runs through the network, the proposed $500,000 investment in the U.S. should provide a boon for Visa.
Choosing to offset the cost to customers by having a minimum spend for card transactions or many businesses are reluctant to make the transition, is because of this among one of the reasons. According to research released Wednesday by the British Retail Consortium (BRC), British retailers spent over £1 billion ($1.29 billion) to accept card payments last year in the U.K. alone, it has been estimated.
Particularly small- to medium-sized ones to cope with this burden, the EU recently introduced regulation to help businesses. According to the BRC, U.K. retailers were saved £500 million last year by new caps on the fees for handling credit and debit card.
However, beyond helping with the initial start-up costs, it argues more can be done by card companies to reduce transaction fees.
“It is ultimately the customer that decides how they wish to pay and BRC research shows that customers continue to use cash for more than 40 per cent of transactions in the UK,” a spokesperson for the BRC said.
“At the same time, cash accounts for only 11 per cent of retailers’ costs associated with accepting payments, compared to 73 per cent for card payments, therefore card companies can better serve retailers and their customers by providing a more cost-efficient service.”
Spurred in part by the growing popularity of new technologies including contactless payment and Apple Pay, it is estimated that, as of this year, more than half of all customer transactions in the U.K. were made via card payments.
But warnings against businesses isolating those customers who continue to prefer notes and coins were issued by the Bank of England’s chief cashier, Victoria Cleland.
“While reliance on cash is less significant than in the past, it is still crucial to everyday life and I encourage the cash industry to continue to innovate, to evolve, and to keep cash relevant and fit for purpose,” Cleland said in a speech on the future of cash.
(Adapted from CNBC)