WAR ON CASH: Visa Is Paying Business To Refuse Cash


Another front has opened in the dangerous war on cash: Visa plans to pay businesses that stop accepting cash from customers.

As reported by the Huffington Post, “The Visa Cashless Challenge, as it’s called, will offer retailers across the U.S. $10,000 (C$12,700) to implement technologies for digital payments — but on condition the retailers stop accepting bills and coins. In these locations, shoppers would be limited to paying digitally, either by credit or debit card, or by smartphone through apps like Apple Pay.”

Visa isn’t hiding their motives, as their CEO Al Kelly has said, “We’re focused on putting cash out of business.”

The Huffington Post notes that Visa isn’t planning to push the cashless policy in Canada yet, but we can bet it’s not far away. In fact Visa has already “praised” Canada for our embrace of digital technology for payments.

Huge risks

I’m currently reading a great book called Antifragile by Nassim Nicholas Taleb. It’s an amazing book which shows why decentralization is so important, and why so many “experts” are “BS Vendors.”

I’ll be writing more about the book and the important ideas it contains in the future, but for now I’ll focus on one of the points he discusses: How things we often see as “efficient,” often carry significant and even catastrophic risk that “elite” decision-makers ignore.

Meanwhile, things that are “redundant” or “inefficient,” are often much more protected from risk and have a far lower downside.

Digital payments and cash are a perfect example of this.

Digital payments are exceedingly efficient – far more so than cash – but are also exceedingly fragile. It is possible for hackers to take down entire digital payment systems, wipe digital bank accounts, and even potentially crash an entire digital economy. That fragility and risk is the price we pay for using more digital payments, yet those in power never discuss this trade-off.

Cash on the other hand is far more inefficient than digital payments, but it is also far more “robust” (a key concept mentioned by Taleb) than digital payments are. No thief could steal the physical wealth of an entire city, province, or country. It would be impossible to “hack” an economy that has a strong physical money component. So, in exchange for less efficiency, cash provides us with much more security against a disastrous event.

Additionally – as Taleb notes while discussing the global banking system – “efficient” but “fragile” systems often destroy any advantage they may have held. For example, though it seems shocking, Taleb points out that in the 2008 financial crisis international banks lost more money than was made in the entire history of banking.

Likewise, an economy based entirely on digital transactions could be efficient for 20 years, and then be completely destroyed with one massive hack. The total economic destruction caused by such an event would immediately render those 20 years of “efficiency” meaningless. In the long run, it would have been far better to have protected the role of cash for those 20 years, since cash is not vulnerable to a massive hack.

We must stop the war on cash

Our so-called “leaders” and “experts” are leading us down a dangerous path. While digital transactions have an important role in our society, that role must be as an augment to the use of cash and physical currency, not a total replacement for it. We must warn of the risks of eliminating cash, and push back when corporations like Visa, or our pathetic governments try to force cash out of our economy.

Spencer Fernando

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4 comments Add yours
  1. I am a retailer and I would much rather take cash. I pay upwards of 3% on every transaction done with a credit card. On sale items discounted by 70-80% I am already losing money – feel like I am giving to Charity. To add 3% to a purchase of $30 or $40 dollars on something that cost me over $100 is added insult to injury. So I like cash.

  2. Well then if those business are willing to not have their products purchased with cash then they should go out of business!!!! It would be a cold day in hell that I would purchase anything if I was told I needed to pay only with a VISA or other card and not CASH!!!!

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