With the onset of the pandemic and the coin shortage in 2020, some businesses decided to stop accepting cash and coins. While the misinformation that was put out by World Health Organization that humans could catch COVID-19 by touching cash and coins was eventually corrected, this caused an unnecessary burden on 24.7% of Americans who rely on cash as their primary method of payment.

These estimated 63 million Americans, who are unbanked or underbanked, were left with no choice but to turn to alternative payment methods – many of them predatory in nature – or switch to another store that may not have been as convenient.

While there is no Federal law that makes it illegal for businesses to not accept cash, that may be about to change. The U.S. House of Representatives introduced the bi-partisan Payment Choice Act of 2021 (HR 4395) in July. Co-sponsored by a large, diverse and bipartisan cross-section of Congress, the legislation would make it unlawful for business to not accept cash for in-person transactions. The Federal legislation mirrors laws that have already been introduced or passed by various states seeking to end cash discrimination.

But why is not accepting cash bad for business? And how can you make sure you are doing what is best for your customers and your business?

There is no way around the fact that “No Cash” actions put unnecessary pressure on marginalized communities. According to a Time Magazine’s Next Advisor report, 19% of American households making less than $30,000 a year are underbanked or unbanked, with African-American (16.9%) and Hispanic (14%) families taking on most of that burden. These numbers mirror St. Louis data , where minorities are three times more likely than whites to live in poverty.

As a result, a cashless society will potentially push these demographics to seek alternative payment methods, such as payday lending or paycards. These alternatives tend to be predatory, and according to a , U.S. Postal Service report , underserved households spend an average of 9.5% of their income on interest fees, with some rates as high as 500%.

While it may be easier for businesses to only accept card-based payments, a vast majority of Americans (82%) want businesses to accept cash, according to the Federal Reserve Bank 2020 Diary of Consumer Payment Choice. In addition, most Americans use ATMs to withdraw cash and studies show that as much as 50% of the money withdrawn is spent in the store where the ATM is located.

With all this in mind, why would any business want to divest in almost 20% of the population by not taking cash?

Right now, St. Louis leaves it up to the business owner to decide which types of payments they accept. However, more and more cities and states are jumping on board to help those that a “cashless society” would hurt most by banning retailers from not accepting cash for the in-person purchase of goods and services – putting the decision in the consumer’s hands.

, Colorado and , Connecticut both made it illegal for business owners to not accept cash in 2021. Currently state laws in , Massachusetts , , New Jersey and , Rhode Island prohibit retailers from not accepting cash. It is also unlawful for retailers to not accept cash in , New York City , , Berkley , , Chicago , , Philadelphia , , Washington D.C. , and , San Francisco . According to the , ATM Industry Association Stateside Monitoring Service , an additional 14 states also introduced bills during the 2020 / 2021 legislative session that would ban cashless stores.

Making sure consumers have convenient access to cash is essential and an ATM is the most popular way consumers access their accounts. In addition, many underbanked shoppers have access to prepaid cards and government-issued cards and need local access to withdraw the cash. Installing an ATM in your business not only gives them easy access, but it also means they will come to you more often and are more likely to spend some of that money in your business.

Installing an ATM doesn’t have to be expensive or a hassle. With our ATM placement program, merchants simply provide 2 square feet of space and a regular 110 electrical outlet. , BFC Enterprises handles everything from purchase of the hardware, installation, maintenance and cash management.

, Contact us today to find out if you qualify for a free ATM.