Cash may be king, but credit card giant Visa is offering some small businesses an incentive to get rid of it altogether. The company announced the "Visa cashless challenge," where 50 U.S.-based food service owners will receive an award of up to $10,000 each to help upgrade their payment technology and grow their business.
The winning merchants must commit to being completely cashless.
According to CBS News financial contributor Mellody Hobson, this is "a very small program, to start" — "keep in mind they have something like 30 million merchants that use Visa around the world" — but the idea is that Visa's "biggest competitor" is cash.
"Cash is still the No. 1 way that we pay in this country, and it's growing around the world. So it's not Mastercard that they're worried about or, it's cash. They want to take some of that business away for cash," Hobson said Thursday on "CBS This Morning."
When people go cashless, Hobson said credit card companies and banks "absolutely" benefit.
"Remember, every time we swipe, they get a piece of the action, somewhere in the neighborhood of 1 percent for them. More for American Express," Hobson said. She also said contactless networks like Apple Pay and Google Wallet will reap the benefits as well, as more people invest in the technology to accept digital payments. There are benefits for the merchant, too.
"You don't have to worry so much about theft, you're not worried about how you close out the cash register at the end of the day, taking the money to the bank at the end of the day. So all of those things go away. It saves a lot of times for the merchants," Hobson said.
But for credit card users, cybersecurity is a growing issue.
"The cybercriminals are getting better and better at what they do, and we just have to be very, very cognizant of that," Hobson said. "We've read about these breaches,, , the one today with . So this is something we've all gotten used to, and we have to understand they're getting more and more sophisticated."
But she said she hopes cybersecurity gets better, and pointed to how the U.S. is lagging behind Europe's.
"We have the chip piece. We haven't gotten the PIN piece done yet, which is the double, two-factor authentication that really helps sort of cut down on this level of theft. But certainly it's the way it's going to be," Hobson said.
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