Cashless ban highlights New York’s unbanked problem

With the passage of a New York City Council on Thursday banning cashless stores, food and retail shops in the city will soon be required to accept traditional legal tender in addition to credit and debit cards and electronic payment methods.

The legislation, sponsored by Councilman Ritchie Torres, comes as more businesses go cashless, embracing new mobile payments as well as traditional credit/debit cards, in a move they say increases efficiency, since cashless transactions save employees time from counting bills in the till, for example. 

But the Council’s bill – which Mayor Bill de Blasio is expected to sign – follows similar efforts by other cities like Philadelphia and San Francisco to protect low-income residents without bank accounts or limited access to bank accounts (referred to as the unbanked or underbanked) by banning the practice of not accepting cash payment. Businesses that refuse cash or charge extra for paying in cash would face $1,000, then $1,500 fines. “New Yorkers who have no documentation, no permanent address, who are living in poverty, who have no brick-and-mortar banking services in their neighborhood – these New Yorkers face deeply entrenched barriers to accessing credit or debit,” Torres said on Thursday.

Data from 2017 compiled by the city’s Department of Consumer and Worker Protection shows that 11.2% – or 354,100 – city households have no bank account. The highest concentration of unbanked households is in the Bronx. 

And while some groups were critical of the bill passed on Thursday, arguing that it would inconvenience restaurants that have to start accepting cash, even they acknowledge that the unbanked issue is one that needs solving.“Regardless of the cashless ban, our elected leaders need to support policies that get more New Yorkers banked, because technology is advancing and mobile payments are the way of the future,” Andrew Rigie, executive director of the NYC Hospitality Alliance, an industry group for bars and restaurants, said in a statement.