The world is waging a war on cash, according to a position paper released today by the ATM Industry Association.
“For decades, anti-cash campaigns, largely led by dominant card brands, have been waged in the mass media with the objective of discrediting cash,” ATMIA said.
A prime example, according to the trade association, is Visa’s “Cashless Challenge” announced this month. The card network plans to offer up to $500,000 to 50 U.S. small restaurants, cafes or food truck owners that commit to going 100% cashless.
“With 70% of the world, or more than 5 billion people, connected via mobile device by 2020, we have an incredible opportunity to educate merchants and consumers alike on the effectiveness of going cashless,” Visa head of global merchant solutions Jack Forestell said in an announcement.
ATMIA quickly blasted the move.
“By paying these food service owners $10,000 to reduce their customers’ payment choices, Visa Inc. has elevated its commercial interests above the public interest in America,” ATMIA CEO Mike Lee said in a press release issued after Visa’s announcement. “This may seem to Visa like an offer that can’t be refused, but these money ‘rewards’ actually send out a message that the underlying business proposition must be unpalatable to both consumers and merchants when stripped of its $10,000 sweetener.”
In its position paper out this week, the trade association said cash is going to play a bigger role in mitigating crime associated with digital payments.
“Currency is going to become more important in the cyber era as a bulwark against identity theft, card fraud, skimming, customer data compromises and the kind of global hacking which can render systems in the public and private sectors inoperable,” it said. “You can’t hack cash in the hand. Nor can cash be used as a basis for identity theft. And it never leads to mass data compromises.”
ATMIA also said cash is a natural budgeting tool and helps consumers be more cautious with their spending.
“Just as cash helps consumers to stay within budget in their daily, weekly and monthly spending, so the total amount of currency in circulation helps central governments to steer national consumer debt levels, based on the truth that ‘you cannot spend what you don’t have,’” it said.
However, the cash world is fighting a rising tide in consumer shifts to digital payments. According to the Federal Reserve’s 2016 payments study, the total number of noncash payments increased at an annual rate of 5.3%, and the value of those payments rose by 3.4% between 2012 and 2015. Credit, debit and prepaid card transactions for six major card networks shot up a combined 13.3% from 2015 to 2016, and purchase volume rose 5.8% to $20.606 trillion, according to global data from card and payment industry publisher The Nilson Report.
In addition, U.S. venture capital investment in fintech companies rose to $1.2 billion in the first quarter of this year, with payments and lending attracting the most funding, according to a recent report by KPMG.
ATMIA, which has more than 10,000 members from over 650 companies in 67 countries, said peaceful coexistence between digital and cash payments is the future.
“Nobody needs a war on cash,” Lee said. “All we’re asking for is freedom of choice for all.”
