The VISA logo and hologram are imprinted on a VISA...

The VISA logo and hologram are imprinted on a VISA credit card in Boston Feb. 7, 2012. Credit: AP

Payment cards company Visa makes money every time you pay for something using a debit or credit card with its logo on. So it's in the company's interest to get as many consumers using cards or Visa-integrated gadgets as possible. But Visa's latest initiative targets small merchants in the food sector instead of consumers, and it's a bid to remove cash as a payment option completely.

Not being able to pay with cash means you have to use a card or device, so you can see why this sounds like a good idea to Visa. What the company is offering small business food service owners is $10,000, which can be used to pay for technology upgrades and marketing. In return, Visa wants the merchant to agree to stop accepting cash.

Visa isn't being quiet about this push to ditch cash. The Visa press release is titled "Visa to Help U.S. Small Businesses Go Cashless." The company also decided to name the initiative "The Visa Cashless Challenge." In total, $500,000 will be awarded to "50 eligible US-based small business service owners," but they must "commit to joining the 100% cashless quest."

According to Naked Capitalism, Visa could struggle to sign up 50 small businesses to its quest. Restaurants operate on very low margins, which Visa's transaction charges would eat into. Employees who rely on the tips they get would likely lose out without cash being accepted, and customers could get annoyed by the idea of a cash payment not being accepted. In other words, Visa's initiative looks like a very big risk to take.

On the other hand, Visa points out the benefits, claiming going cashless generates extra revenue and saves millions of hours of labor. If that's really the case, then why doesn't Visa tweak its initiative and offer the $10,000 incentive without demanding cash be dropped? If it's right, use of cash to pay would decline anyway.

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