What Visa’s “War On Cash” Says About the Future of Your Credit Union

July 18, 2017 at 9:07 am Leave a comment

In one of the savviest PR moves I’ve seen in quite some time, with a simple press release Visa has gotten the mainstream press talking about the utility of cash,  particularly for small service businesses.

No one thinks that the wallet is destined to join the Smithsonian anytime soon, but by offering grants to small businesses that agree to stop accepting cash Visa has highlighted one of the  key trends that is reshaping banking.

Cash will not always be King. After all, Cash evolved over thousands of years to  provide a means for merchants,  pilgrims  and crusaders to buy and sell goods far from home without getting stiffed at the checkout counter.  It’s had a nice run.

Today, currency moves around the world in seconds and block chain technology has the potential to eliminate any confusion over who owes whom what and when.

Consumers get this. In its 2016 Payments Study report the Fed estimates that 117.5 billion consumer payments were made using noncash methods in  2015 compared with only 50.7 billion in 2000. It points out  that “the substantial increase in the number of consumer noncash payments suggests that, not only were consumer payment choices shifting away from checks for both purchases and bill payments, but there also likely was significant replacement of consumer cash payments as well.”

As this trend accelerates how you process payments is going to become almost as important as the loans and rates you offer. This is why Vanitu  has made a $10 billion bid to buy British payments processor Wordplay Group and why JP Morgan Chase is reportedly considering a  counteroffer.   And it’s why the American Banker is reporting  this morning that Bank of New York Mellon’s decision  to hire Charles W. Scharf, who sits on Microsoft’s Board of Directors, as its new CEO, signals the Board’s recognition  that  to survive long-term, it “will have to look more and more like a payments Mellon.”

Entry filed under: General, technology. Tags: , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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