n any given weekday many consumers will pay for a cup of coffee, a bagel, a newspaper, road tolls, a quick lunch, parking and their dry cleaning with cash rather than a credit or debit card. Individually these may be small purchases, but combined they are significant: They add up to about $375 billion a year, according to Visa U.S.A.

Many merchants, primarily those selling such small-ticket items, have preferred to accept cash for payment, whether out of the need for speedy check out or because the interchange rate structure has made most small-ticket electronic transactions too expensive to process.

In April 2006, Visa launched two initiatives addressing those speed and cost issues to accelerate card acceptance and usage at traditionally cash-heavy merchant locations.

No signatures, lower interchange rate

Card-based transactions tend to slow down the check-out process. They require card swiping, cardholder signature checking, transaction authorization and receipt printing. Visa's new No Signature Required program eliminates the signature requirement (and the receipt requirement unless the cardholder requests one) for transactions less than $25 in 17 merchant categories. These include parking lots and garages, drug stores and pharmacies, dry cleaners, restaurants, news dealers, tolls and bridges, taxicabs and more.

(Similarly, with MasterCard's Quick Payment Service program, enhanced in 2004, transactions less than $25 do not require a signature and a receipt is optional.)

Visa improved its Small Ticket Payment Service by reducing the interchange rate on Visa check card transactions of $15 or less in seven new merchant categories (bringing the total to 14 categories).

Visa's volume on purchases less than $25 in targeted small-ticket segments totaled $49.1 billion in 2005, a 25% increase over the previous year. Visa is predicting that by the end of 2006, 27% of all Visa transactions may qualify for the No Signature Required program.