Visa and Marqeta announce a multi-year global partnership, as Visa digs deeper into how to operate in a cashless world.
Marqeta is an open-API card issuing platform who supply the payment code stack behind popular consumer-facing companies like Instacart and Square.
Visa will also be investing in Marqeta and the two companies will work together to develop virtual and tokenised payments functionality in keeping with Marqeta’s developer-friendly code stack.
For Visa, this is a logic step in a string of moves to get ahead of the market, as cashless economies look like more of a possibility. Two weeks ago it announced a competition in which it would donate $10,000 to small businesses who go 100% cashless; some labelled it a ‘bribe’. The move was a strategic one according to Jack Forestell, Head of Global Merchant Solutions at Visa Inc: “With 70% of the world, or more than 5 billion people, connected via mobile device by 20201”, said Forestell, “we have an incredible opportunity to educate merchants and consumers alike on the effectiveness of going cashless.”
Visa’s cashless competition was introduced a week before the EU announced a ban on card surcharges. And while this may seem like a blow to companies like Visa, it’s one that might be short-lived: as the payment company scrambles to find new ways to maintain a business model, changes such as this could help to normalise card payments. If using cash and card cost the same for customers and, as is currently the case, salaries are paid into bank accounts, the drift towards a cashless economy is seen by some as inevitable.
A study last year suggested that only 11% of US consumers prefer cash. And certainly in big cities, it seems increasingly rare for people to carry cash at all; in London, my friends and I used to comment, when a homeless person would pass us drinking outside a pub and ask for change, we just don’t have any on us anymore.
But a large number of people, charity workers soliciting cash donations, labourers who get paid in notes, cab drivers, the elderly and the very young, are unlikely to have bank accounts. Also, anyone who works on tips, from waiters and waitresses to maids, and small local retailers, hairdressers and restaurants, high credit card processing fees on small purchases are not worth it. And that’s where the EU ruling comes in, it could make card transactions viable for many, if not all, of the aforementioned groups.
But while cashless payments make everything easier for governments and banks it leaves the public at the mercy of powerful institutions. At any moment the number ATMs and bank branches can immediately be reduced, for example. Also, every transaction is suddenly traceable by governments.
In India, the simple decision to remove high-value banknotes from circulation has caused shock and even deaths. In the Western world there are deep concerns about an existence in which your every move is trackable, raising the question as to whether a cashless society would spell the end of privacy.
More concerning still might be the lack of public discourse on the issue. Elon Musk only has to break wind to get AI above the fold on every news website, but a cashless society seems both more imminent and, potentially, equally as seismic a change to deal with. So with Sweden heading towards being the world’s first cashless country, and while an answer to whether that’s a good thing or not might be scarce, perhaps it’s simply something worth talking about before it becomes a given.
