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Visa’s goal: Kill off cash to fatten their bottom line

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POSTED July 14, 2017 1:41 a.m.

Walk into 2nd City — a Filipino taqueria in New York City — and if you are male, female, straight, gay, transgender, black, white, Asian or whatever — the law is real clear. They have to do business with you unless you are committing some recognized transgression such as being naked, loud, being disruptive — that type of thing.
But if are planning to use the official currency of the United States of America, they will not accommodate you. That’s because they refuse to accept cash.
Visa loves the concept, but not for the same reason as the taqueria owner who contends it reduces manager’s workloads by 23 hours a week by eliminating the need to arrange for change, make bank runs, and count cash.
Visa sees a cashless society as a mega profit center.
Visa — born decades ago from the bowels of Bank of America — started a major push this week to make it more difficult for you to use cash at places covered by public accommodation laws such as retailers, restaurants, gas stations, convenience stores, and barber shops.
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.
Banks collect fees approaching 2 percent of the transaction amount from merchants on every purchase made with a credit or debit card. The cost is collapsed into the price of goods and services the public purchases.
The Federal Reserve Bank of San Francisco notes that 32 percent of all consumer transaction payments in the United States in 2015 were made using cash. Debit cards accounted for 27 percent, credit cards 21 percent, electronic transfers 11 percent, checks 6 percent, and other forms 3 percent.
If Visa can get the 32 percent of the cash transactions to come from debit or credit cards, they and the rest of the financial cartel can profit off 97 percent of the money that changes hands from the corner 7-Eleven to a Bass Pro Shops location.
Spend $100 using a debit card and the merchant is on the hook for roughly $2 to the bank. Yes, the cost is reflected in what they sell.
But what will happen at places where cash is still king — 7-Eleven, as an example — prices will go up. That’s because if Visa succeeds every customer will be using cards of some type, sending the merchant’s costs up significantly.
Visa’s big push announced Wednesday is a Trojan Horse (Visa calls it’s a gift) for the small merchant: The gift is  $10,000 “free” from Visa to put in place the latest payment technology. The only thing they will require is that small merchants stop accepting cash.
The initial program will involve 50 food vendors and restaurants at $10,000 a pop. Besides technology, merchants can use a part of the $10,000 for marketing.
There is a reason why Visa is willing to give away $10,000 to a small business.
If Mom & Pop’s Taqueria grosses $400,000 a year and all of their customers are forced to use credit or debit cards, Visa — and their associates — have $8,000 they can mine. In five years — the time it will probably take the technology to be obsolete — Visa would collect $40,000 for a nice tidy $32,000 profit. Of course the next generation of technology would be on the back of Mom & Pop’s Taqueria.
How big of a deal is this to big banks?
Jack Forestell, the global head of Visa’s merchant solutions, was downright giddy about all the money banks will be swimming in if they succeed during remarks he made last month.
To quote the real benefactor of banning legal tender, “We’re focused on putting cash out of business.” Forestell also called destroying the ability of the consumer to spend cash as Visa’s “No.1 growth lever.”
Visa is already the proverbial 900-pound gorilla. By volume, Visa in 2016 cornered 59 percent of all general purpose debit and credit card transactions made by consumers in the United States. Mastercard was a distant second at 25 percent.
The question is whether this should be legal?
One would think businesses that operate under the rules of the government that deal with the public should accept the cash that the same government circulates.
There really ought to be a law that a place of public accommodation has to accept legal cash as payment.
If not, Congress will be turning 100 percent of the consumer economy as well as consumer pay — given workers will have no choice but use debit cards to buy food — to be ravaged by the 2 percent transaction fees charged by Visa et al.
If Visa succeeds bank will essentially get a cut every time any consumer spends money whether it is to eat, buy bottled water, get gas, or purchase toothpaste.
So the next time you hear people act as if anything that “disrupts” the economy has to be good, just stop and think that for the most part they are based on Visa’s scheme of basically finding a way to make you have to give them some of your hard earned cash.

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