Visa’s push for cashless society

WHAT IT IS

  • Visa is offering restaurants and other small businesses in the food industry $10,000 if they stop accepting cash.
  • The money would be used to improve the restaurants’ technology and allow them to accept payments via smartphones or smart watches.
  • Visa believes that a cashless society would benefit small businesses immensely. The credit card giant claims that in New York City alone, businesses could generate an additional $6.8 billion each year.

WHY IT MATTERS

Going cashless is a futuristic idea that is becoming a reality. Sweden is the leader in this global trend and is projected to be a cashless society by 2030. Innovations like Apple Pay, Venmo, and general online banking apps are starting to make cash more obsolete. Visa creating this initiative amongst small businesses does pay off dividends, for their processing fee revenues would increase immensely if cash disappeared from the economy.

  • PRO PLASTIC – “Just swipe it…”

    • Black market:   It is argued that without cash, terrorist and other organized crime groups would have a harder time financing themselves.
    • Cost:  The cost of creating the penny is already more than what a penny is worth.
    • Harder to tax evade:   If every purchase is registered, a government can trace purchases back to the buyer. So, if someone reported that he/she made $80,0000 in the past year and then spends $40,000 on really unnecessary items, then they probably weren’t truthful when reporting their income.
    • Convenience:   A cashless society would make paying for items very convenient. There would be no more loose change that would end up unused.
    • Crime:  Cash related crimes (bank robbing, extortion, etc.) drop significantly in a cashless society.
  • PRO PAPER – “Paper to burn…”

    • Trust:   A cashless society would place an immense amount of trust in its government. Also, the risk of cyber attacks would significantly increase.
    • Difficulty:   Not everyone can afford the necessary technology. For example, in Stockholm the government had to give beggars card readers so they could receive donations.
    • Inequality:   A cashless society would give more power to the financial institutions of the world. This phenomenon would likely increase wealth inequality.
    • Privacy:   In a cashless society, all transactions would be registered and tracked. Is the potential convenience worth the potential lack of privacy?

WHERE WE ARE NOW

  • The emergence of cryptocurrencies, like Bitcoin.
  • 24% of Americans make most/all financial transactions in cash. This number was 36% five years ago.

THINGS TO THINK ABOUT

  • The trust issues between Americans and the U.S. government when the US went off the gold standard.
  • The cashless society debate also depends on which country you are talking about. It might work in Sweden, but might not work in Argentina where bank corruption led to many people losing their savings.