Visa has used its public submission to the Reserve Bank of Australia's (RBA's) review of innovation in the Australian payment system to call for the bank to re-examine its 2007 assertion that cash is a cheaper and superior payment method to electronic payments, while labelling cash as an insecure and costly way to pay.
"We feel that the time has come for a full costs and benefits analysis of payment options in the Australian economy. As such, Visa feels there is a strong case for an independent RBA-sponsored reassessment of the broad comparative costs and benefits of different payment channels, including cash and electronic payment options," Visa said in its submission. It added that such a study would provide a better insight into the decline of traditional payment methods, including cash and cheques.
Visa added that the rise of electronic payment methods like contactless cards, phone-based near-field communication and other non-traditional methods have rendered cash obsolete and expensive.
"In the past, RBA-produced materials dating from 2007, it has been contended that the cost of cash is lower than the cost of electronic payments, again this is stated to be particularly the case in relation to lower value transactions.
"With the advent of contactless payments, Visa believes that such findings are no longer current," the payments giant said.
Visa also aired its criticisms of cash as the world's primary method of payment, saying that there are in fact a myriad of costs, problems and security holes to contend with that cashless, electronic payments aren't bound by.
"Visa is of the view that cash is an expensive, out-date payment option that does not well serve the interests of a modern economy like Australia's, even in relation to smaller value purchases. It is a payment method that contains numerous embedded costs including production, replacement, handling, storage, transport, security, higher fraud rates, lack of traceability and accountability, higher rates of tax evasion and costs linked to its ease of use for the black economy, money laundering and terrorist financing."
Visa has introduced numerous cashless payment technologies throughout the world over the last decade, including the EMV chip card and contactless payWave facilities. It has also conducted partnerships with financial institutions like ANZ Bank to trial near-field communication payment technology.