- A ban on cashless retail and food establishments was passed by the New York City Council on Thursday, according to the council's website. The bill prohibits establishments from refusing to accept cash and from charging customers who pay cash a higher price than cashless customers.
- At press time the ban was waiting for the mayor's signature before being enacted.
- The bill penalizes operators up to $1,000 for the first violation and up to $1,500 for each following violation. There are some exceptions to the ban, establishments don’t have to accept cash denominations over $20 and transactions made completely online, by phone or mail are excluded.
New York City is the largest U.S. city to have approved a ban on cashless stores. Similar bans passed in Philadelphia, New Jersey and San Francisco in 2019. Chicago and Washington, D.C. are mulling similar policies as well. These bans are costly too, with fines up to $2,000 for each violation in Philadelphia. New Jersey's ban could cost $2,500 for the first offense and $5,000 afterward.
Much of the argument against cashless stores has been that it excludes those that are unbanked or underbanked, which is when someone has a bank account but uses other services to cash checks. About 12% of New York City’s population did not have a bank account in 2013, which was higher than the national average of 7.7%, and 25% were underbanked at that time, according to a committee report.
The growing trend among local governments to ban cashless locations could slow the trajectory of the global movement toward digital payments. Within the next decade, one in 10 transactions are expected to be made with cash, and many establishments have already been adding self-order kiosks and other technology in preparation. But these bans have led to restaurants needing to buy new registers that hold cash even after some have installed self-order kiosks. Sweetgreen, which was a cashless establishment before multiple bans were put in place, reversed course and began accepting cash payments in Philadelphia in July 2019 and rolled out cash payments across its system by the end of last year.