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A Cashless Society is Bad for U.S. Consumers

Updated: Sep 18

Why Lawmakers are Pushing to Make Cash Universally Accepted


As the pandemic continues to cause confusion and concern about the way we spend money, the fact some businesses do not accept cash is under examination on both the state and federal levels. Some businesses are still opening slowly, and a misrepresented statement by the World Health Organization about bills and coins carrying the coronavirus influenced many to post “No Cash Accepted” signs as a preventative measure.


These actions put unnecessary pressure on consumers who prefer not to use cards, are unbanked, underbanked, or simply like to use cash. In the Federal Reserve Bank 2020 Diary of Consumer Payment Choice, 82% of consumers said they want businesses to take cash. Most importantly, 57% of consumers pulled that money from an ATM - with more than half using the cash they withdrew from the ATM to purchase items at that location.


Is it Illegal for Businesses Not to Accept Cash?

As of today, there are no federal laws making not accepting cash illegal. Although the CASH Act making it federally unlawful not to accept cash in physical retail businesses died in Congress in 2019, it was a catalyst for cities and states to introduce legislation to protect consumers who rely on cash. And the Federal bill had support on both sides of the isle and may still pass in future sessions of Congress.


The Federal Reserve has made it clear that cashless policies are up to the private business unless state laws say different. However, some cities and states see the need to make cash acceptance universal in order to prevent discrimination against the unbanked, underbanked and low-income households that rely on cash.


The list of states and cities taking on “cashless society” is growing and currently includes: New Jersey, Rhode Island, Massachusetts, Washington D.C., San Francisco, New York City, Philadelphia, Chicago and Berkley. With Colorado being the latest state to join the push to make cash payments available for all when Gov. Jared Polisthe signed a new law mandating businesses in his state accept cash in May 2021.


And the number of states that introduced bills during the 2020 / 2021 legislative session that would make it illegal for brick-and-mortar stores to not accept cash is even longer, according to the ATM Industry Association Stateside Monitoring Service. Those states include:

  • Alabama

  • Arizona (state agencies)

  • Connecticut

  • Delaware

  • District Of Columbia (limited situations)

  • Idaho

  • Maine

  • Massachusetts

  • Michigan

  • Mississippi

  • New York

  • North Dakota

  • Oklahoma

  • Pennsylvania

While some states such as North Carolina do not have a law prohibiting “no cash” policies and doesn’t mandate businesses notify their customers of this policy, the North Carolina Attorney General publicly stated that they should do so as a courtesy.


Cashless Society Discrimination

The strongest side of the “no-cash” ban argument is reflected in the statistics. According to a Time Magazine’s Next Advisor report, over 14 million people (6% of US population) are unbanked and an additional 48.9 million adults (18.7%) are underbanked, which means they use non-bank alternative financial services such as pay day cards.


By not accepting cash, retailers are putting an unnecessary burden on 24.7% of the population, with most being low-income and minority households. According to the most recent National Survey of Unbanked and Underbanked Households by the Federal Deposit Insurance Corporation (FDIC), African Americans make up 16.9% of the unbanked population and 14% of Hispanic households. But the strongest indicator of the unbanked is income level. On average, 19% of households with a family income of less than $30,000 are unbanked, compared to just 2.4% of households making more than $30,000 annually.


Overall, a cashless society does nothing to assist marginalized communities or to help businesses attract low-income households. The U.S Government and many small businesses are slowly recognizing that forcing people to use one payment over the other is not helping their communities or their businesses.


Benefits of Hosting an ATM

Installing an ATM in your business comes with copious benefits. Not only does it give millions of consumers easy access to the cash they want, it differentiates your business from those that may have jumped on the “cashless” bandwagon, but you also gain passive income. Statistics show that providing easy access to cash entices consumers to choose your business and when they use the ATM in your location, they also tend to spend around 50% of that cash on-site.


Contact us today to see if you qualify for a free ATM.

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