This Legislation Could Force Stores to Take Your Cash

Stores and restaurants in several states would be required to do something pretty basic if certain lawmakers have their way: accept their customers’ cash.

The legislation comes amid a worldwide move toward “cashless payments” using cards or mobile devices, which supporters say are safer, quicker and more convenient. But critics say an outright ban on cash discriminates against those without credit or bank accounts, and raises concerns about privacy and data security.

The New Jersey Legislature and the Philadelphia City Council have passed measures this year that would ban cashless stores. New York City, Washington, San Francisco and Chicago are weighing similar bills.

“It’s important to recognize the fact that not everyone has access to banks or lines of credit,” said State Senator Nellie Pou, one of the sponsors of the bill in New Jersey.

Ms. Pou, who represents the Paterson area, said that she had many constituents who lack bank accounts, including low-income families deterred by fees and minimum balance requirements. (A report by the Federal Deposit Insurance Corp. in 2017 estimated that 6.5 percent of American households were “unbanked.”) Older adults also may not have electronic payments set up, or be comfortable using them, she noted.

The penalties in the proposed bills range from hundreds to thousands of dollars. In the New Jersey bill, they could go up to $5,000 for a second offense. A spokesman said the governor was considering whether to sign the legislation.

Ms. Pou said that business groups and Amazon had expressed opposition to the bill, and she worked with businesses to include exceptions, including for airports, parking facilities, car rental companies and any “internet-based transaction.”

She added that she had asked Amazon, which is operating five pop-up stores and one bookstore in New Jersey, to come up with ideas for how they could serve those without a bank account, but that she did not hear back. Amazon declined to comment.

Massachusetts already has a little-known law requiring retail stores to accept both cash and credit. There have been calls for the legislature to clarify whether the law, approved in 1978, applies to restaurants.

Retailers that have adopted cash-free policies argue that the majority of their customers already pay electronically and that not having to fumble with cash makes the lines go faster for everybody. Without cash on hand, employees are free from a number of related tasks, like counting it and transporting it to the bank or an armored truck. A lack of cash also cuts down the danger of robbery or theft.

“It’s more efficient for our teams and restaurants because they’ll get back hours of their day to cook and spend time with you in the restaurant instead of the administrative work associated with cash,” the salad chain Tender Greens said in an online statement when it put a cash-free policy in place last year.

Other shops and restaurants that have instituted cash-free policies — some in just one location, some in many or all — include Starbucks, Dig Inn, Dos Toros, Sweetgreen and Argo Tea. In-flight purchases on airplanes have been cash-free for a long time, and some government offices do not accept cash.

But critics have raised concerns about the vulnerability of digital transaction systems to misuse by the state, private companies or hackers, not to mention power failures during natural disasters.

Ritchie Torres, a councilman from the Bronx who introduced the New York City bill, said he had concerns about the implications of a cashless economy “for New Yorkers who face historically rooted barriers to both credit and banking.”

“What if you have no papers? What if you have no credit history?” he asked.

“The goal here is not to stifle technological progress,” Mr. Torres said. “A cashless payment can be one option among many, but it should never be the sole option.”

Stephanie Martz, senior vice president and general counsel of the National Retail Federation, argued that businesses should be able to decide themselves how to operate.

But she added that only a “handful” of businesses were experimenting with cashless payment, and that the vast majority of small purchases were still made in cash.

“We don’t see that going away anytime soon,” she said.

Around the world, some countries have outpaced the United States in developing and instituting electronic payment technologies. Sweden has perhaps moved fastest toward a cashless society, with some officials now trying to pull the reins back on a process that could upend the role of the state as sovereign guarantor.

In China, many consumers use their mobile devices to pay for goods and services through WeChat and Alipay. Even some street musicians use QR codes to collect money from passers-by.

The South Korean central bank has called for a “cashless society” by next year. And India has heavily promoted cashless transactions — even banning large bills — as Prime Minister Narendra Modi sought to root out corruption and achieve his vision of a “digital India.” But most Indians continue to use cash.

Credit card companies and banks, of course, have championed the greater use of cashless payments. In an article for The Guardian last year, Brett Scott, a British activist and author, argued that the seemingly “obvious and natural” evolution toward cash-free payments was “the direct result of a hegemonic project on the part of financial institutions.”

“The true motive is corporate profit,” he wrote.

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