When Philadelphia City Councilman Bill Greenlee heard that a coffee shop and a salad restaurant right near City Hall didn't accept cash, he thought it sounded unfair.
"I can get my coffee and muffin, but the person behind me who has the monetary unit of the United States of America, that's been accepted here in Philadelphia since Ben Franklin, can't?" he said in an interview. "It just seemed wrong."
Cashless stores and events are just starting to crop up in the retail landscape with much hoopla -- consider the splashy launches of Amazon Go stores -- but they're already running into hurdles from legislators in cities and states around the country. These governments are concerned that what some see as technological innovation could actually widen societal gaps between those who have access to financial services and those who don't.
This work could ensure we don't end up with a future in which there are stores that lower-income people just can't use. But this
may also prevent new cashless experiments from ever taking hold and help cash stay king for a long time.
Cash's demise at the hands of cards, e-commerce and mobile payments has been heralded for decades as a faster and more secure way to pay for stuff. After all, you can't lose a digital wallet the same way you can lose a real one. Yet cash is still the most frequently used form of payments (representing 30% of all transactions), particularly for smaller transactions (where it's 55%), according to the Federal Reserve.
While you might opt to pay for a bottle of water with card instead of cash, there's still a swath of the population that doesn't have that choice. Roughly 8.4 million households in the US were considered "unbanked" in 2017, according to the FDIC. That means no one in those households had access to a checking or savings account.
"It's about being fair to people and giving everyone an equal chance to buy a basic product," Greenlee said.
Also in March, New Jersey Governor Phil Murphy signed a bill into law banning cashless stores in his state.
Assemblyman Paul Moriarty, who was the primary sponsor of the bill, has cited myriad reasons for the ban, including disadvantaging the poor, the young, and even those folks who just want to stay off the grid.
"Ultimately, we want employers to have the ability to choose how they receive payment," Wallace said. He noted that there are reasons businesses might not want to accept cash,like reducing the safety risks that come from holding a lot of greenbacks. In other words, who's going to rob a store with no bills in the register?
Wallace worries the law will stifle innovation and keep businesses from coming to New Jersey.
The Philadelphia Inquirer reported that Amazon, which has launched a chain of cashless convenience stores called Amazon Go, was trying to be exempt from the local bill. But in April, Amazon said its stores would accept cash. Its first location that accepts cash opened this month in Manhattan and it plans to add that feature to its 11 other existing stores.
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At the end of April, cashless salad chain Sweetgreen said it would also start accepting cash.
"The major constraint on [cashless stores] will be legislation, and what we're seeing right now here in the US, is Philadelphia and others saying hey, we're going to ban it, you have to offer a different payment option," said Joanne Joliet, a Gartner analyst.
However, Joliet thinks there will still be plenty of customers who choose to go to stores like Amazon Go for the sake of convenience, efficiency, loyalty or whatever else.
Splitting the difference
In the midst of what might seem like a pro-and-con argument, there might actually be a middle ground.
"The real answer isn't to stop from going cashless, it's to figure out how underbanked people can be better served by financial technology, and we certainly have the answers out there to get that done," Rivka Gewirtz Little, IDC research director for global payment strategies, said of people with limited access to banking resources.
There are also places using tech to make sure that if you're only carrying cash, you can still buy what you want.
In 2017, Mercedes-Benz Stadium opened in Atlanta. The stadium operators decided to go cashless so they could speed up concession lines and cut costs that stem from handling actual tender.
By the end of 2018, they moved 40% of their concessions off cash. Around the same time, they rolled out kiosks that would convert cash into Visa debit cards that could be used around the stadium and anywhere else, with no fees.
"We felt we were addressing a lot of the concerns out there -- you don't have to have a bank, you don't have to provide any private personal information, and when you get these cards, it can be completely anonymous," said Greg Beadles, chief operating officer for AMB Sports and Entertainment, the parent company of the Atlanta Falcons and Mercedes-Benz Stadium.
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Beadles said that while only about 2% of attendees are using the 10 kiosks throughout the building, the company plans to keep the machines to meet the needs of anyone from high schoolers at a championship football game, to folks from abroad attending a soccer match, to anyone who just wants a hotdog and doesn't have a card.
Looking to draw in more customers, Walmart and Amazon both created prepaid debit cards that can be reloaded in physical stores to help more people shop online even if they don't have bank accounts or credit cards.
Healy Cypher, CEO of Zivelo, a company that makes retail kiosks, said there's been an uptick in interest in cash-to-card machines. He said retailers and restaurants are starting to ask themselves how to find balance with the payment methods they could or should offer.
Greenlee isn't opposed to kiosks, and he acknowledges that someday everyone may have access to the banking resources they need.
"Maybe there will come a time in the future where maybe there's no need for a law like this," he said. "We're not there at this point."