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Cash and Ice Cream in the Big Apple

Categories : Cash ensures competition among payment instruments, Cash has legal tender status, Cash is available to all users, Cash is the most widely used payment instrument
February 1, 2023
Tags : Access to cash, Consumers, Digital payments, Financial inclusion, Retailers, Unbanked, US
New York City passed a cashless ban in February 2020 to protect the right of consumers to pay in cash, including those from unbanked households.
Manuel A. Bautista-González

Ph.D. in U.S. History, Columbia University in the City of New York

Post-Doctoral Researcher in Global Correspondent Banking, 1870-2000 – Mexico and South America, University of Oxford

This post is also available in: Spanish



Unbanked Households in New York City

“Lack of access to banks online and in-person coupled with not being able to afford a bank account because of fees like overdraft are hindering far too many New Yorkers from getting banked. Over the past year, we have seen how vital a bank account is to financial stability. From paychecks to stimulus checks and now the advance Child Tax Credit payments, a bank account is key to getting access to those funds safely and quickly.” –  N.Y.C. Department of Consumer and Worker Protection (DCWP) Acting Commissioner Sandra Abeles

According to the DCWP, an estimated 301,700 households had no bank accounts in 2019 (9.4% of New York City‘s total). That ratio is lower than the share of unbanked households in 2015 (11.5%, see Graph 1). The Bronx has the highest unbanked rates in New York City (see Chart 1).

Figure 1. New York City: Share of Unbanked Households, 2015-2019

Source: DCWP (2021).

Chart 1. New York City: Estimated Unbanked Households by Borough, 2019

Note: The boroughs’ sum does not match the N.Y.C. total due to rounding. Source: DCWP (2021).

Per the DCWP, most unbanked households are highly concentrated in neighborhoods with:

New York City’s 2020 Cashless Ban

Councilmember Ritchie J. Torres first introduced a ban prohibiting food stores and retail establishments from refusing to accept cash payments in 2019. The Torres’ sponsored cashless ban passed on February 23, 2020, and became effective on November 19, 2020. Similar cashless bans exist in Philadelphia, San Francisco, Massachusetts, and New Jersey.

The ban sought to ensure “that all New Yorkers, including those who are unbanked or underbanked, can make retail and food purchases using cash” (City Record, September 8, 2020, 3493):

Chart 2. New York City: Penalties for Violating Prohibitions on Cashless Establishments, 2020

Source: City Record (September 8, 2020, 3493).

A New York City Retailer Refuses U.S. Legal Tender

Despite the cashless ban, the upscale Van Leeuwen Ice Cream chain (founded in 2008) refused to take cash at its 19 locations.

You Can’t Pay for your Scoop of Royal Wedding Cake Ice Cream with a $10 Bill

Dozens of consumers filed complaints about Van Leeuwen with the DCWP. The city’s Office of Administrative Trials and Hearings (OATH) found Van Leeuwen violated the cashless ban over 90 times, incurring more than $112,000 in penalties.

Van Leeuwen’s “brazenness felt almost ideological,” wrote Pamela Paul, a New York Times opinion columnist. Paul mentioned some costs of cashless payments.


In October, Van Leeuwen entered a settlement agreement with the city’s DCWP:

Cash is king, which is why the Cashless Ban Law was passed to protect the unbanked and underbanked in our city. We will not allow any business to take advantage of this vulnerable population or penalize customers just for wanting to use cash to pay for things. This agreement will not only ensure that those who patronize Van Leeuwen will now have the option of paying in cash, but, more importantly, it sends a clear message that those who repeatedly violate this law will be held accountable.” – N.Y.C. Mayor Eric Adams.

No New Yorker should be discriminated against because they can only—or want to— pay with cash. While DCWP takes an education-first approach to enforcing the city’s laws, systemic and flagrant defiance will not be tolerated. This is more than just an issue of compliance with the law, it’s also an issue of equity and treating all New Yorkers fairly.” – N.Y.C. DCWP Commissioner Vilda Vera Mayuga

This post is also available in: Spanish