“The enemy is Cash for us” – Alfred Kelly Jr., CEO of Visa

Just as with all hefty, powerful entities, the payments company Visa has an agenda. One that exerts itself on the consumer psyche. Visa wants you to forget about cash and start instead using its new and attractive alternatives: digital money.

And remember – it was your idea.

We are focused on putting cash out of business,” Visa’s Al Kelly said, having taken over the role of CEO in 2016. He added that the company intends to get additional “consumers into the payments market through more and more transactions on Visa cards.”

It is predicted that two companies, Visa and MasterCard, will take control of 90 percent of the UK electronics payments sector by 2026. Over the past few years these companies have tried to fashion an environment of inconvenience, strangling access to cash through ATM decline. It has been suggested that they have competitively squeezed ATM company Link through continued lowering of their own fees, threatening to commandeer its client banks. Link was forced to react, lowering its own fees whilst struggling to keep ATMs in remote areas open. This has contributed to a worrying number of ATM closures across the UK.3

“Visa and Mastercard’s main objective isn’t to win ATM market share from Link, but to drive consumers away from cash by killing off ATMs,” suggested Mark Falcon, former director of regulation and strategy at the Payment Systems Regulator (PSR).

However, it is not just Visa, but the banks themselves that push for denial of access to cash. Since 2015, there have been 3000 bank branch closures, with hundreds of ATMs closing each month. The message conveyed is that consumers are moving towards digital payments and that banks are adjusting to consumer demands, but with each branch closed banks cut their own operational costs and strengthen profits.

This is another example of consumers being told that they want something, and it has been compared to the wide-spread introduction of self-service checkouts in supermarkets. When it was first introduced self-service was an alternative, and as some people used this option, supermarkets took the opportunity to proclaim that the market had spoken: human service was largely unwanted. Consumers, apparently, want less interaction, less available assistance, and a non-existent level of service.

The reasons for these moves are clear. Profit is profit. On the face of it, if people pay with cash, the cards companies would have to settle for the lesser fees generated through ATM cash withdrawals. And face-to-face banking and supermarket checkouts are significantly costlier to companies than automated services.

What is particularly interesting is that while consumers are alleged to be the driving force for this change, it is far from apparent that they will benefit in any way.

Visa’s contactless card payments section on its website reads, “Look, tap, go is all you need to know.” This simply highlights the company’s spend-first-think-later agenda. Convenience for the consumer in not having to break large cash notes or carry exact change is appealing, but it is also more convenient to retailers and big finance that the consumer has only a vague notion of what they are actually spending. It has been demonstrated that consumers spend more when they use cards.

This is due to a well-documented psychological phenomenon in which delayed completion of spending reduces the perceived significance of the act. This is compounded by the fleeting gesture of contactless payments. Cash, psychologists have noted, is the most transparent, that is to say palpable, mode of spending: “there is a tight coupling of the consumption and the payment, thereby accentuating the pain of paying.”

However, Visa wants you to spend more, spend more quickly, and think about it less. Just as they aim to reduce consumer spending choice by reducing access to cash, their technology diminishes consumer self-control as well, at a time when consumer spending power is significantly down. The more easily you choose to spend in a world in which every payment yields revenue for Visa or MasterCard, the more revenue these companies can make from you. And yet, as the UK-wide ban on retailer card use charges came into effect, Visa and MasterCard both doubled their fees for retailers. Fees that will inevitably roll downhill to the consumer. Being the end user, it is easy to forget that in many ways you are also the product.

Moreover, if you spend with cash, to some extent the transaction is anonymous, or simply private, depending on your view point, and this creates opportunity loss for retailers whose interests influence Visa’s interests. With every extra transaction made through Visa’s services there is further trackable data on consumer spending trends and on specific consumer purchasing decisions.

“The enemy is cash for us,” Visa’s Al Kelly says. And indeed, by bringing about the demise of cash in a real sense, by creating an all-digital economy, companies in the payments ecosystem will discover an unprecedented level of influence and power. If Visa and MasterCard have their way, they could soon dominate the notion of the pound in the way Google dominates search engines.