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U.S.: Payment Choice Act Seeks to Protect Cash

Categories : Cash has legal tender status, Cash is a contingency and fall-back solution, Cash is available to all users, Cash protects privacy and anonymity
July 28, 2021
Tags : Acceptance of cash, Legal tender, Regulators, US
The bi-partisan bill would prohibit businesses and retailers from refusing to accept cash from consumers for in-person, brick-and-mortar retail purchases.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

U.S. Congressman Donald M. Payne, Jr. of New Jersey introduced a bill on July 26 to protect U.S. currency as a payment instrument for goods and services.  The Payment Choice Act would make it illegal for retail businesses to reject cash for in-person retail transactions at stores across the country.  The bipartisan bill has 28 co-sponsors.

“There are too many stores and businesses that want to reject American cash in favor of digital payments,” said Rep. Donald M. Payne, Jr.  “But cash is the only option available for millions of Americans to pay for food, housing and other essentials.  In addition, I have serious concerns about the safety and privacy of the data that companies are collecting from consumers during routine purchases.  Besides, there are few things more American than cash.  A few years ago, we were fighting over who should be represented on our bills.  Now, it seems companies are more than ready to get rid of them entirely.”

Financial Inclusion, Privacy, and Resilience

Rep. Payne, Jr. introduced the bill to protect American currency due to several issues concerning digital payments.  In 2019, 6% of U.S. adults were unbanked, meaning they did not have a checking, savings, or money market account at all, and 16% of U.S. adults were underbanked, meaning they had a bank account but also used alternative financial service products such as money orders, check cashing services, pawnshop loans, auto title loans, payday loans, paycheck advances, or tax refund advances. Currently, there are 55 million Americans who lack a bank account or credit card and need to use cash to pay for their necessities.  These Americans will be left out of the economy completely if cash is banned.

Privacy is another concern when customers use digital payments.  Data collection is a $200 billion industry, and recent company data breaches in the U.S. and worldwide have revealed private information on millions of customers.  In addition, cash is the only way to pay for items during a natural disaster.  If a hurricane or other catastrophe were to knock out a power grid anywhere in the country, Americans would not be able to pay for critical, life-saving supplies to protect themselves and their families.

Some States Have Imposed the Acceptance of Cash

The Federal Reserve states that “There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.”

In recent years, several cities such as New York, San Francisco, Berkeley (California), and Philadelphia, and the states of New Jersey, Colorado, and Washington, D.C. have enacted laws and implemented policies to protect cash users in retail payments and unbanked customers who rely on cash. Massachusetts has required businesses to accept cash since 1978. High-profile national retail chains that stopped accepting cash in recent years — such as Amazon Go stores and the fast-food salad chain Sweetgreen—reversed their policies after facing criticism for excluding shoppers who rely on cash.



This post is also available in: Spanish