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Should restaurants and stores be allowed to reject cash as a form of payment? Washington, D.C., thinks maybe not. The city is considering a ban on cashless businesses. Similar bans have already been passed in several parts of the country. NPR's Alina Selyukh reports it's a rare case of governments getting ahead of a tech trend before it spreads.
ALINA SELYUKH, BYLINE: After almost 10 minutes of standing in line at a coffee shop, Ritchie Torres realized something.
RITCHIE TORRES: I only had cash in my pocket.
SELYUKH: And this coffee shop no longer accepted cash, only cards or mobile payments, which he didn't have on him.
TORRES: It was a humiliating experience. And I remember wondering aloud, how could a business refuse to accept cash, which is legal tender? When you open a dollar bill, it reads, this note is legal tender.
SELYUKH: Torres is a city council member in New York. He says his constituents have also complained about a spurt of cashless stores, especially seniors. He wrote a bill to ban businesses from rejecting cash. Last month, the New York City Council passed it almost unanimously, joining Philadelphia, San Francisco and the state of New Jersey. A similar ban is up for a hearing in Washington, D.C., next week.
Here's Tazra Mitchell with the research and advocacy group DC Fiscal Policy Institute.
TAZRA MITCHELL: A cashless economy is not an inclusive economy because whenever you exclude people from being able to use cash at businesses, you're essentially discriminating against people who are low-income, people who are homeless, also undocumented.
SELYUKH: Getting a credit or debit card is not easy for everyone. You have to have an ID, often a utility or another bill and money to deposit, a financial history. Mitchell says in D.C., nearly a third of residents rely on cash every day because they don't have a card or even a bank account.
The Federal Reserve has found the use of cash is declining. Two years ago, for the first time, it found cash had stopped being the No. 1 payment choice. But it's still the most common way that people pay smaller amounts under 10- or $25. That's particularly true for people over 55 and under 25.
TORRES: Whatever your reasons, you as the consumer should have the power to choose your favored method of payment.
SELYUKH: The biggest names to try going cashless have been Amazon, with its automated convenience stores, and the salad chain Sweetgreen. They and other businesses argued cash is inefficient. It slows down the line, requires armored cars, attracts break-ins or skimming by the workers. More and more people are now paying with their phones, and credit card companies are rewarding the trend. They get a cut every time a card is swiped. Visa paid a $10,000 award to 50 businesses that stopped accepting cash.
STEPHANIE MARTZ: We don't think that in five years, laws that ban stores from going cashless are going to look smart.
SELYUKH: Stephanie Martz is the general counsel of the National Retail Federation, which has actually been fighting with credit card companies over their fees. Martz argues the cashless trend is not really that big. Not many stores have gone cashless. And some of the loudest proponents have now reversed their policies. That includes Sweetgreen and the cashier-less Amazon Go shops, which now both accept cash.
MARTZ: Some stores have gone cashless. Others have gone cashless and have gone back to accepting cash. And I think that's a real indication that the market is working, and retailers and restaurants are being responsive to what their customers want and need.
SELYUKH: Of course, this also happens to coincide with new laws starting to ban the cashless practice. Either way, Martz envisions a near future where everyone has access to digital payments, thanks to new technology. And in that future, banning stores from going cashless could hamstring them from becoming more efficient. But Torres and Mitchell argue cashless laws are there to balance technological progress with an economy that's fair and inclusive.
Alina Selyukh, NPR News.
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