Saturday , October 23, 2021

Do Cashless-Payment Policies Create a ‘Segregated Purchasing System’?

New Jersey’s legislature this month passed a bill requiring merchants to accept cash at the point of sale, and several big cities, including New York, are considering similar measures. But does cash really need legal protection from payment cards and mobile wallets?

That’s the question public officials as well as executives in the retailing, ATM, and other sectors of the payments industry are considering. Opponents of cashless stores say businesses that require customers to use credit or debit cards or mobile payments are shutting out consumers who may not have access to those payment forms.

A report released Thursday by a New York City Council committee says 11.7% of the city’s households are unbanked compared with 7.7% for the U.S., and 25.1% of city households are underbanked versus the nation’s 20%.

“The unequal impact of cashless policies is cause for concern,” the report says. “While the technology provides a range of benefits for business owners, relying solely on cashless payments generates a segregated purchasing system. This policy poses great harm for certain parts of the populations, and statistics show that this is disproportionally felt by poor, marginalized, and vulnerable communities.”

The Council is considering two proposed ordinances pertaining to cash usage. One would ban retailers and restaurants from refusing to accept cash. First-time violators could be subject to a fine of $250, and subsequent violations could be fined $500. The other would permit cashless stores but require owners to post clear signage about their payment policy. The Council’s Consumer Affairs and Business Licensing Committee held a hearing Thursday on both and laid them over for action later.

The hearing happened to occur on the same day that Inc., which is expanding its network of Amazon Go cashier-less stores, announced it was canceling plans to build a second headquarters in New York City’s borough of Queens, a proposal that generated strong local opposition.

The Philadelphia City Council on Thursday passed an ordinance that would prohibit most stores from refusing to accept cash or charging cash-paying customers a higher price, according to, a news site affiliated with The Philadelphia Inquirer. The measure now awaits Mayor Jim Kenney’s signature. Another pro-cash measure is pending in Washington, D.C., according to press reports.

The National Retail Federation, however, questions the need for legislation to protect cash from its electronic alternatives.

“Retailers are not going cashless,” J. Craig Shearman, vice president for government affairs public relations at the Washington-based trade group, tells Digital Transactions News by email. “The retail industry as a whole welcomes cash and most likely will for years to come. The examples of retailers turning down cash are very few and isolated, and usually involve specific circumstances.”

But Bruce Wayne Renard, executive director of The National ATM Council Inc., says the Jacksonville, Fla.-based trade group of ATM deployers and suppliers supports the recent city proposals.

“There is a significant portion of America’s population that are unbanked or underbanked, making most or all of their daily payments using cash,” Renard says in an email. “These citizens, typically in lower socio-economic strata, should not be locked out of access to goods and services simply because they don’t have a credit card or mobile wallet to make a purchase. There is a basic ‘fairness/non-discrimination’ aspect to businesses not accepting cash, and this is what’s at the heart of the local and state legislation that has surfaced of late in our major cities.”

The New Jersey bill, which passed both houses of the state Legislature by overwhelming margins two weeks ago, was awaiting Gov. Phil Murphy’s signature as of Thursday. A spokesperson in the governor’s office says the office doesn’t comment on pending legislation and wouldn’t say if Murphy, a Democrat, plans to sign the bill.

The proposal, A-591, would apply only to point-of-sale purchases and exempt car-rental companies. If enacted, New Jersey would join Massachusetts as the only states to protect cash payments in stores.

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