War on Cash

8 August 2017

United Kingdom

Paul Race

Glory

War_on_cash_blog_header_C04_02_1860x896_desktop

I recently came across an article from the Pittsburgh Post Gazette.  The article mentioned a nationwide Visa campaign aimed at ‘enticing small restaurant owners to stop accepting cash’.  The company is offering a ‘payment’ of $10,000 to 50 restaurants or food vendors who take on the challenge and a spokesperson describes the initiative as part of a ‘war on cash’. This has been followed by coverage in the UK press of a similar planned programme on this side of the Atlantic.

For me this raises a number of issues.  Firstly though a small campaign, it does create a precedent and suggests that an incentive is necessary to encourage change.  Secondly is $10,000 sufficient incentive and finally is it right that a global corporate should act in such a way to restrict people’s choice and in particular to deny the 10 million people who are unbanked (and indeed those who choose to use cash) access to the food outlets involved?  Surely the basis of a free market has always been if you have the money you can purchase the goods.  This changes things to if you have money (or credit) in the right form then you can have access to goods.  

Now as an economist this gives rise to other issues.  Should individuals be encouraged to use a line of credit rather than cash?  I know I could use a debit card but what if I’m only carrying cash and a credit card my options then become to use a credit card or leave the restaurant.

Apparently restaurants are within their rights to refuse cash payment, but how many customers would they lose by doing so?

The July announcement has received a mixed response.  In an article entitled ‘Visa’s goal: Kill off cash to fatten the bottom line’ Manteca Bulletin stated ‘Like most disruptive technology, this isn’t a move to make life more convenient for the merchant or the consumer.  It’s about making money for the disruptor’.

Contact Us

Never miss the latest blog

Subscribe