In New York, many retailers, such as SweetGreen and DosToros, now prohibit payment in cash. This practice, known as "cashless", is particularly problematic for minorities and low-income earners, who are often under-banked. The bill was approved almost unanimously and must now be given the green light by Mayor Bill de Blasio.
Cashless practice
In recent years, the number of cash-only stores in New York and other major U.S. cities has increased. Most are restaurant chains, such as salad specialist SweetGreen, the DosToros chain and Gotan, which has three stores in New York.
What they all have in common is that they require their customers to pay by credit card or via various mobile payment applications. For retailers, cashless payment means faster transactions and higher revenues. With fewer and fewer consumers paying in cash, it has sometimes proved more profitable for these retailers to eliminate a position dedicated to cash management - counting, recording and depositing it in the bank.
Some of them have also introduced a system enabling customers to leave a tip directly via their card or mobile payment app. A more transparent system for bosses, who see it as a way of simplifying accounting.
Giant Amazon is reportedly planning to open 3,000 cashless Go Stores across the United States by 2021. In these grocery stores, customers won't need to pay for their purchases on the spot: they'll be debited automatically as they leave, via an ultra-modern camera and sensor system.
A discriminatory practice for underbanked populations
However, in Philadelphia, San Francisco and the state of New Jersey, Amazon Go has had to rethink its plans and is now legally obliged to accept cash. The process is far from straightforward for consumers, however, who must contact a manager on arrival, choose their products and pay at the checkout, accompanied by a sales assistant.
The cities of Philadelphia and San Francisco, as well as the state of New Jersey, based their ban on cashless transactions on the federal law giving coins and banknotes legal tender status.
In New York, the bill was approved by an overwhelming majority of 43 to 3, and now requires only the endorsement of Mayor Bill de Blasio, who had already spoken out in favor of the bill prior to the vote.
The aim is to avoid a practice that discriminates against people without bank accounts or credit cards. In the United States, 14 million adults do not have a bank account, i.e. 6.5% of American households. Most of these people are the most disadvantaged, especially minorities.
Meanwhile, cash payments in the US still account for 49% of transactions under $10. SweetGreen has already backed down in the face of criticism.