Slate’s Money Box Blog – July 13, 2017
Written by Henry Grabar
There is something knowing about the title of Visa’s latest initiative, the Visa Challenge, in which the payment company will offer 50 restaurants, cafes, and food trucks $10,000 each to eliminate cash payments. “We are declaring war on cash,” a Visa spokesman told the Associated Press.
It’s a bit like if GM issued a Chevrolet Challenge, and gave you money to drive around in a Silverado (perhaps in exchange for ditching your bicycle), or if Anheuser Busch InBev paid you to drink exclusively Budweiser. Despite Visa’s exhortations about the perks of running a cashless business, it’s an admission that for merchants, reliance on the American credit card triopoly is an unpleasant predicament. …
Independent businesses don’t like credit card companies. According to a 2016 survey of independent retailers conducted by the Institute for Local Self-Reliance, the median share of revenue spent on swipe fees was 3 percent. Small businesses pay more in swipe fees than they make in profit in many cases, ILSR co-director Stacy Mitchell said, meaning that the banks and payment companies make more money from those businesses than the owners do. Not surprisingly, the survey found strong support for a federal cap on swipe fees, which add up to more than $50 billion a year for U.S. retailers.
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