Bi-Partisan Political Controversy Surrounding Cashless Stores

On January 30th, the U.S. House Committee on Financial Services held a hearing titled “Is Cash Still King? Reviewing the Rise of Mobile Payments.” The Committee headed by Congresswoman Maxine Waters (D-CA) held this hearing to determine whether businesses should be allowed or prohibited from refusing cash payments in stores. The policy rationale behind the debate is whether cashless stores would have the unintended consequences of harming marketplace access for low-income Americans who do not have a bank account. 

In response to the emerging trend of cashless merchants, two Congressional bills have been introduced. H.R. 2650 titled the “Payment Choice Act of 2019 sponsored by Rep. Payne (D-NJ) has 34 co-sponsors and proposes to prohibit retail businesses from refusing cash payments. Rep. Payne argues for Americans to have a choice of how to pay for goods. Also H.R. 2630 sponsored by Rep. Cicilline (D-RI) titled “Cash Always Should be Honored Act,” proposes to make it unlawful for any physical retail establishment to refuse to accept cash as payment.     

Late last year Pew Charitable Trust released a study titled “Rise of Cashless Retailers Problematic for Some Consumers” that showed cash remains a vital payment option; at least here in the U.S. While the study listed how proponents of going cashless cited issues such as security, efficiency and an improved customer experience, the study stated “Cash made up nearly 40 percent of in-person transactions in 2017, according to the Federal Reserve, and, although its usage continues to decline, cash is still the most widely used payment type. Further, a Pew survey of consumers in 2018 about their payment experiences found that 78 percent used cash at some point in the previous month; for 14 percent (more than 35 million adults), cash remains the primary method of payment.” The study explored other elements of who is using cash and who isn’t. 

The Committee heard from the following witnesses: 

Ms. Deyanira Del Rio, Co-Executive Director, New Economy Project, 

Mr. Usman Ahmed, Head of Global Public Policy, PayPal, 

Mr. Aaron Klein, Fellow, Economic Studies and Policy Director, Center  on Regulation and Markets, Brookings Institute,

Ms. Christina Tetreault, Senior Policy Counsel, Consumer Reports,

Ms. Kim Ford, Executive Director, U.S. Faster Payments Council

We expect this to continue to be a point of contention as our society progresses towards modernization. States such as Massachusetts, New York, New Jersey, Pennsylvania and California have and continue to debate this issue, especially with their concerns on lower income access to the marketplace. If you are a technology stakeholder and you are needing guidance in how to navigate federal and state policies on this issue, contact Lanton Law.