From 19 November, a ban on businesses refusing cash becomes law in New York City, protecting not only people’s choice of how to pay, but most especially the city’s unbanked and underbanked, its elderly and its more vulnerable citizens.
Sponsored by NYC Councilmember Ritchie Torres—recently elected to Congress—the new rules could see businesses fined up to $1,500 each time they turn away a cash-paying customer. For many, this simply means an additional payment option when they get to the cashier. For the 360,000+ households in NYC without bank accounts, however, it will make the difference between being able to buy goods and services, or being excluded.
The potential societal cost of a cashless economy, I think, outweighs the potential benefits for businesses.
The legislation does make allowance for businesses that wish to be cashless at the point of sale, saying they must provide a kiosk that will convert cash to a debit card, free-of-charge. This preserves choice for the business whilst ensuring it is accessible to all.
Square—a provider of small-business payment platforms—says it saw cash payments fall eight percent between August 2019 and August 2020. However, the Federal Reserve’s view is that the demise of cash has been exaggerated, given around 70 percent of people surveyed in spring 2020 said COVID-19 had not led them to avoid carrying cash.
New York now joins Philadelphia and San Francisco—cities that require businesses to accept cash payments—and New Jersey and Massachusetts, which have state laws banning cashless business.