Are we about to see the start of a serious attempt to turn Britain cashless? If Visa gets its way, the answer is yes. After piloting a scheme over in the US that incentivises businesses to go cashless, the financial services company are keen to bring it to UK shores.
In the US, Visa are offering 50 small business $10,000 (£7645) if they only accept card transactions on their premises. Now, they’ve stated that ‘we hope to bring similar cashless initiatives to other countries, including the UK.’
It’s certainly no surprise to learn of Visa’s ambition. Earlier this year Al Kelly, the company’s chief executive, explained to industry figures that Visa was ‘focused on putting cash out of business’, since ‘the number one growth lever is the conversion of cheque and cash to digital and electronic payments.’
In essence, it makes good financial sense – for Visa, at least. Others, however, are wary of the news. James Daley, from consumer group Fairer Finance, said:
‘It is easy to categorise it as a bribe, but ultimately they are incentivising companies to do away with cash, and that’s not the job of people like Visa.’
Daley was also keen to remind others of the wider impact, saying:
‘In 50 years, it seems unlikely that most of us will be using cash. But banks need to let evolution follow its natural course, rather than accelerating it. As a responsible society, we need to look after vulnerable customers who rely on cash.’
It’s worth remembering that only last month the Bank of England’s chief cashier, Victoria Cleland, claimed that 5% of adults (or, around 2.7 million people) are reliant on cash.
Visa may also run in to further problems with a British version of the scheme. Last year, British retailers paid out an estimated £800 million on ‘interchange fees’ – that’s the charge applied every time a customer uses a card in-store. And while these charges are capped, it’s reckoned that retailers pay approximately 5.5p for each debit card transaction; a figure that rises to 16p for credit card purchases.
So, while a handful of UK businesses are beginning to make the transition to cashless, whether a significant number of businesses will be happy to accept additional interchange fees in a bid to eliminate cash transactions remains to be seen. And without enthusiastic pick-up from the wider retail world, Visa’s plan could be scuppered.
What is undeniable is that card transactions are growing, having risen above cash payments at retail level last year. Indeed, the financial industry overall has begun embracing new technologies. Not only have we seen a major growth in internet banking and shopping, helped in part by greater online security measures, we’ve also seen apps and all-in-one ATMs that now offer basic banking services we currently receive in our local branches.
It’s possible, then, to see Visa’s cashless push as an extension of that revolution, removing the tangible and moving consumers across to digital transactions. It’s undoubtedly the direction that the financial sector is pursuing. Quite when we can expect to see this dramatic switch to a cashless economy is unclear, though, with Visa admitting that ‘at this time, we do not have a firm plan on when such an initiative would be available in the UK.’