State Lawmakers Prevent Businesses from Going Cashless

Inside Subprime: April 10, 2019

By Grace Austin

While many see going cashless as making purchases easier for consumers, some lawmakers are claiming it’s discriminatory and are passing laws banning the practice.

Philadelphia and the state of New Jersey are the latest places to take up the anti-cashless crusade.

The New Jersey State Legislature passed a bill that would require stores to accept cash in February 2019; that was signed into law by the governor in March 2019. The law now requires that every brick and mortar store accept cash in the city. The exception are municipal parking lots, car rental locations, and businesses within airports. Businesses can be fined thousands of dollars for not complying.

“I’m pleased we are now the second state in the country that will now make it clear that the U.S. dollar is legal tender and that retail establishments should accept it or face the consequences,” New Jersey Assemblyman Paul Moriarty, D-Camden, said after the state legislation was signed into law.

Philadelphia rejected card-only policies when Mayor Jim Kenney signed a ban on cashless-only stores into law in February 2019. All brick-and-mortar stores in the city will now have to accept cash by July 1.

Massachusetts already requires all stores to accept cash and credit. That law was passed in 1978.

Legislation on cashless bans has been discussed in major cities across the country, including Chicago, Washington, D.C., San Francisco, and New York City.

In New York City, legislation was introduced that could be passed by mid-2019, according to the bill’s sponsor.

Currently, there aren’t federal laws that prohibit businesses from only accepting cards, but it comes at a time when many businesses are testing out going cashless.

Businesses say it makes transactions easier for consumers, and cuts down on inefficiency and overhead costs. Going cashless can also make those storefronts more secure, as they’re less susceptible to being targets of robbers looking for quick cash.

Opponents of going cashless say it discriminates against the millions of unbanked, underbanked (those who have bank accounts but may use services such as payday loans), and those without access to credit. All of which, consumer advocates say, are usually low-income people, and more often than not, immigrants, the elderly, and people of color.

Cash is still the most-used type of payment in the country. But the move toward going cashless seems to be where America’s headed anyway, even if businesses are still testing it out. A Pew Research Center survey found that 29 percent said they don’t make any purchases with cash in a week, up from 24 percent in 2015.

Overall, a balance is what many are advocating for, even as they propose legislation to ban the practice of going cashless.

A spokesperson for the city of Philadelphia told NBC News that “we remain concerned about how this measure impacts innovation in our retail sector. We constantly seek to strike the balance of growing our economy while ensuring our growth is inclusive.”

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