What card-only establishments really need is what cash-only bars and diners have had for years: an on-premises method of conversion. It would effectively be a reverse ATM, that you could feed cash and get a prepaid card (minus, of course, an ATM fee).
If something like this doesn’t exist, it seems like a good startup opportunity.
It doesn’t look like it went anywhere, online info on the company is scant apart from a few press releases.
Basically you’re just talking about offering a physical cash-friendly terminal to the digital economy. Maybe someone should try that angle. Counterfeit and money laundering will be huge issues. It’s hard to anonymously launder money at scale with storebought prepaid cards, because of the humans in the sales loop (which also allow non-money-laundering transactions to happen anonymously). A workable compromise might be to require a SSN/PIN combo at the reverse ATM.
As for counterfeit: sophisticated scanners? I think many banks allow you to deposit cash or checks at their larger, bank-branded ATMs. Perhaps that technology is available. You’ll probably just end up buying “counterfeit insurance” and then try to get whatever tech will drive your premiums down.
All good points. If the install market for these is fast-casual restaurants, it's probably not unreasonable to cap them at something like $20 per transaction. While the cards should be reloadable, they could probably also have limits for both carried balance and reload frequency, and the presence of human staff at restaurants should also deter money-laundering activity.
That would just add an extra step to cash transactions, if you plan on allowing people to buy gift cards with cash. The whole point of the policy from the business’s perspective is to cut costs around handling cash.
If something like this doesn’t exist, it seems like a good startup opportunity.