GOVERNMENTS FORCING BUSINESSES TO ACCEPT CASH

Cash doesn't have the status it used to.

In fact, some state and local governments are forcing businesses like restaurants and retail shops to continue accepting cash — concerned that cashless businesses effectively discriminate against consumers who do not have bank accounts or credit cards.

New York City will require most stores and restaurants to accept cash as of Nov. 19, joining cities including San Francisco; Berkeley, Calif.; and Philadelphia, all of which mandated acceptance of cash last year. New Jersey required acceptance of cash statewide in 2019, and it has been illegal for businesses to refuse cash in Massachusetts for decades. Many other cities and states are considering similar steps.

But as digital payments become more widespread, "we're concerned that people aren't going to be able to pay for necessities," said Linda Sherry, director of national priorities at Consumer Action, an advocacy group.

Businesses that refuse cash put at a disadvantage people who lack traditional bank accounts or can't qualify for credit cards, consumer advocates say. About one-fourth of American adults were unbanked or underbanked in 2019 — meaning they lacked a bank account or had one but also used alternatives like check-cashing services, the Federal Reserve found. Those consumers are more likely to be in a racial or ethnic minority group, have lower incomes and be less educated.

Some may like cash because it helps them budget their money or teach their children about spending. Others may be wary of a loss of privacy and vulnerability to hacking with electronic payments, or simply prefer cash, Ms. Grant said. "The decision should be the consumer's."

The federation and dozens of other advocacy and privacy rights groups are backing federal legislation that would prohibit brick-and-mortar retailers from refusing to accept cash. (It's unclear if the bill will be considered this year, given the menu of pandemic-related issues before Congress.)

To read the complete article, see:
(https://www.nytimes.com/2020/09/11/your-money/cash-credit-cards-coronavirus.html)

Ten years ago, cash was used in six out of 10 transactions but by 2019 it was used in less than three in 10 transactions. The outbreak of COVID-19 may have accelerated this trend, as data suggests that market demand for notes and coins declined by 71% between early March and mid-April during the lockdown, although demand has since been recovering.

The decline in the use of cash in transactions is putting pressure on the cash system. Commercial operators who distribute cash rely on high demand to maintain the attractiveness of their business models, and cover large fixed costs, such as bank branches and ATMs. In March 2020 the government announced that it would be bringing forward legislation to protect access to cash and address the sustainability of the cash infrastructure.

According to the NAO, the pressures on the cash system could mean that people who rely on cash find it more difficult to use cash in transactions. Published research shows that older people and those on a low income are more likely to make cash transactions.

David adds:

To read the complete article, see:
The production and distribution of cash (https://www.nao.org.uk/press-release/the-production-and-distribution-of-cash/)

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