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Who Gets Hurt When the World Stops Using Cash


Consumers still use cash for more than one-quarter of all payments, according to Federal Reserve data from October, its latest comprehensive study of payment behavior. Cash was used for almost half of the payments under $10.

In a narrower Fed survey in April and May, aimed at spotting payment changes during the pandemic, 70 percent of participants said they were not avoiding cash because of concern about the virus.

Cash remains important to consumers despite a menu of competing payment options. “Many consumers value and prefer to use cash for everyday purchases, while others use cash as a backup, or for the convenience of small value payments,” Mark Gould, chief operating officer of the Federal Reserve Bank of San Francisco, said in a statement last month that accompanied the narrowed Fed survey.

Shelle Santana, a visiting scholar at Harvard Business School who has studied payment trends, said it was unclear how aggressive the enforcement of the cash requirements had been during the pandemic. She said she foresaw a “less cash” society, rather than a truly cashless one, in the near term, since many people continue to rely on hard currency.

Some businesses that stopped accepting cash have reversed their policies voluntarily, Ms. Santana noted, after realizing they were excluding some customers.

“No one,” she said, “wants to turn away business.”

Here are some questions and answers about paying with cash:

Is it legal to refuse to accept cash?

There is no federal requirement that businesses accept cash or coins as payment, according to the Federal Reserve Board. “Private businesses are free to develop their own policies on whether or not to accept cash” unless state law says otherwise, the board explains on its website. Businesses like movie theaters, convenience stores and gas stations may refuse to accept bills over $20, and bus lines may ban payment of fares in pennies, the Treasury Department says.

How will New York City enforce its cash requirement?

The city’s Department of Consumer Affairs is responsible for enforcing the new rule, which was enacted this year. The department said that enforcement would be based on complaints and that it would issue instructions for filing a complaint before the rule took effect. Businesses that fail to comply may face fines of up to $1,000 for the first violation and $1,500 for subsequent violations.

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