Why New York is Defending Cash

Jan 23, 2023


For over two years, it has been illegal for New York businesses to refuse cash payments, and the city has since been actively defending payment choice with fines for offenders. New York Times columnist Pamela Paul recently explored one particularly stubborn holdout, and why defending cash is so important.

In a column titled ‘The Cost of Going Cashless’, Paul named and shamed Van Leeuwen’s—a purveyor of artisanal ice cream with 20 shops across New York City that refused to comply with the cash law for almost two years. It displayed signs warning customers cash would not be accepted, logging at least 90 legal violations, declining to show up for administrative hearings and refusing to comment publicly on its unlawful policy. Following $33,500 of fines and threats of further legal action, it has finally agreed to allow full payment choice.

Nobody should be discriminated against because they only want to or can pay with cash. It’s not for the business to decide who they want to serve.
"Vilda Vera Mayuga, Commissioner of New York City’s Department of Consumer and Worker Protection

As Mayuga succinctly says, a fair and democratic society cannot allow businesses to discriminate against certain groups of customers. Why would they want to in the first place? Paul points out that cashless transactions have clear beneficiaries, led by banks and credit card companies such as Visa and Mastercard, who enjoy $138 billion earnings in service fees alone each year. Tech companies providing cashless payment services and profiting from users’ personal and transaction data are also highly motivated to eliminate physical money.

While cash-free means profits for credit card industries and efficiencies for merchants in terms of training workers and managing their time, it isn’t cost-free for everyone.
"Pamela Paul, Columnist, New York Times

Paul highlights a study that showed merchants are increasing their prices by around 1.4 percent in order to offset the fees they pay credit card companies. She also raises the risks of accidental double charges and identity theft, plus the issue of personal information being sold to third parties.

Do you want your payment app or credit card company to share exactly how many beers or Big Macs you’ve bought in the past week with its data partners, or to know every item you picked up at the pharmacy?
"Pamela Paul, Columnist, New York Times

In conclusion, Paul says ‘the most significant objection to a cashless system is whom it shuts out.’ Cash enables everyone—regardless of age, credit history, income or immigration status—to pay for goods and services. Cashless options typically require a bank account, which comes with additional requirements not everyone can meet. Ultimately, an equal society needs to support payment choice, which means allowing everyone the option of using cash.

Going cashless sounds so sleek and shiny and tech-forward, but like many high-tech initiatives, it doesn’t necessarily translate into progress for all… Widening another divide between the haves and the have-nots isn’t the cost-free leap forward proponents make it out to be. Someone always pays the price.
"Pamela Paul, Columnist, New York Times
Last Updated: Jan 23, 2023