
New York on track to ban cashless stores and restaurants - Kaibeezy
https://www.cnn.com/2020/01/23/us/nyc-cashless-ban/index.html
======
mikece
From the Federal Reserve website:

Q. Is it legal for a business in the United States to refuse cash as a form of
payment?

A. Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States
coins and currency [including Federal reserve notes and circulating notes of
Federal reserve banks and national banks] are legal tender for all debts,
public charges, taxes, and dues."

This statute means that all United States money as identified above is a valid
and legal offer of payment for debts when tendered to a creditor. There is,
however, no Federal statute mandating that a private business, a person, or an
organization must accept currency or coins as payment for goods or services.
Private businesses are free to develop their own policies on whether to accept
cash unless there is a state law which says otherwise.

Link:
[https://www.federalreserve.gov/faqs/currency_12772.htm](https://www.federalreserve.gov/faqs/currency_12772.htm)

~~~
chrisseaton
Is a transaction yet to occur, or that can be cancelled easily when posted
terms aren't met, really a 'debt' in the legal sense, though?

~~~
Slartie
This is probably the loophole by which both statements "cash is legal tender
for all debts" and "not accepting cash is legal" can coexist. There is no debt
if the transaction does not happen because one of the participants is
unwilling to enter it for some reason (with the reason being that the other
person does want to pay cash).

Banning specific reasons for not making business is possible however (it is
done to protect ethnic minorities for example), so the situation can probably
easily be changed by legislation that bans "wants to pay in cash" as a legit
reason for not entering into a transaction at stores that are open to the
general public.

------
jedimastert
> Businesses that still want cashless transactions can provide a machine that
> exchanges cash for a gift card, but must accept cash if the machine breaks
> down, according to the new law.

This would be a huge issue to me. I will admit that I don't live in NYC, but
if I was to travel there on business and a random restaurant made me trade in
$20 for a gift card to pay for a $8 meal in a place that I will probably never
go back to, that's $12 out of my pocket that I paid in "cash is inconvenient"
tax to that restaurant.

Even worse, if I go to a store all the time (e.g. it's the only grocery store
within walking distance and I don't have a car) but I'm underbanked, then I
have to continually keep money in their "bank".

> "Your total comes out to $20 but you only have $8 in store-bucks! Don't have
> exactly $12 in cash? That's a shame. I guess you'll have to come back to
> spend the rest!"

Later you find out that the gift cards expire. Oops.

~~~
diebeforei485
In NYC you could walk into a CVS or DuaneReade and use cash to purchase a
prepaid Visa card that works anywhere Visa cards are accepted.

~~~
codazoda
Where I live these cards are expensive. For example, I considered buying one
for a $60 a year service.

The card itself costs just $1, but there is a $6.95 per month fee. So it costs
me $7.95, minimum, to use one of these (13%).

There are also fees for reloading the cards without EFT. If you keep the card
all year it costs $83.40.

~~~
abalos
This legislation should really be about making this process free and easy
rather than punishing stores for being lean.

------
abalos
This strikes me as ridiculous and heavy-handed.

We should focus on finding a way to provide vulnerable groups a way to pay at
cashless stores rather than increasing the overhead of operating a business
(accepting cash, maintaining change, coordinating bank deposits, etc.). Many
of these places are coffee shops where their entire ledger is automated.

How can we complain that small businesses are closing in NYC and then continue
to add regulations which may make it harder for them to operate? That seems
like an oxymoron.

~~~
mech1234
The vulnerable are often underbanked. They might not have a bank account,
debit or credit card, or smartphone with Venmo/Cash app/(whatever app is
popular today).

Cash is the easiest way to help vulnerable groups. If a homeless person wants
to buy a cheeseburger, its better to accept the cash rather than have him fill
out FORM NY-892-F INDIVIDUAL RETAIL ESTABLISHMENT CREDIT ACCOUNT CREATION
FORM, proposing to send a monthly bill to his non-existent address, or non-
existent email.

~~~
Moowiguy
The US has over 6 million unbanked which are not necessarily poor. Some choose
to be unbanked. I'm developing an app and network to help with this problem,
It allows businesses to become ATMs where you not only withdraw cash but some
could accept to reload an E-wallet which in turn would allow you to buy things
online without a bank account. (maybe later we would launch a physical card) -
DO you think it will work ?

~~~
dragonwriter
> DO you think it will work ?

Nope. Businesses can and do already reload value cards (including prepaid
debit cards) which allow (among other things) buying online without a bank
account, and it hasn't solved the problem.

------
xfitm3
Cash is legal tender and should be required to be accepted at all businesses.
Electronic payments have overhead, too, so I don't accept that as an argument.

Electronic payments are a privacy concern for me. It's a big data collection
source and it fuels companies like Axciom who built extremely detailed
consumer dossiers on everyone.

Health insurance premiums tied to purchases? A teenager buying condoms who
doesn't want their parents to know? Denied employment because you've purchased
nicotine?

Not far fetched.

~~~
chrisseaton
> Cash is legal tender and should be required to be accepted at all
> businesses.

They're legal tender for _debts_. If they don't want to sell you something
because you can't agree mutually acceptable payment terms then there is no
debt.

~~~
cjg
I think the person you are replying to meant "should" in the sense of "I want
things to be a certain way" rather than "I think it is true that".

------
diebeforei485
All this concern about the unbanked/underbanked could be more effectively
channeled into making banking more accessible IMO. As an example, the city
could provide a free reloadable prepaid card to people who qualify as
underbanked (based on some combination of income and residential address).

Does this bill mean car dealerships (more popular in the outer boroughs than
most people think) and jewelry shops will no longer be able to refuse
briefcases full of cash as payment?

~~~
cesarb
> As an example, the city could provide a free reloadable prepaid card to
> people who qualify as underbanked (based on some combination of income and
> residential address).

Then you still have the people who are underbanked for some reason but don't
qualify as underbanked under that criteria. The only reliable way to do it
would be to provide it to _everyone_ , no questions asked (you can't even
require proof of identity or residence, otherwise you'd still have the
homeless people who lost their documents and can't get new ones). In the end,
that reloadable prepaid card becomes a more complicated, less reliable form of
physical cash.

~~~
heavyset_go
And this will never exist because of money laundering and KYC. Cash is just
easier.

------
miggol
As someone who in the past year has only used cash to pay for illicit
substances, I was quite surprised by the title. Why punish business owners for
choosing a more efficient and safe payment method? But having read the
article, well, I see it differently. I did not know that cash still played
such an indispensable role in the lives of many vulnerable groups in the U.S..

Does anyone have more info on what is meant by "alternative financial
services"? I'm guessing they're not referring to bitcoin...

~~~
Izkata
> I did not know that cash still played such an indispensable role in the
> lives of many vulnerable groups in the U.S..

I'm not even close to "a vulnerable group", but I still use cash for
convenience. It's faster than card, most places don't have phone-based
payments (I don't use them anyway, never felt worthwhile), and I don't clutter
up my bank statements with daily purchases (lunch, groceries, etc).

------
jypepin
Cashless stores is something we see a lot in Amsterdam. I always thought that
they probably loose a lot of clients, both because of lack of cash and also
because they only accept the "pin" card which is, afaik, a Netherlands-only
type of debit card.

But at the same time it's also probably safer and less management with
accounting done automatically.

~~~
hocuspocus
According to Wikipedia, the PIN domestic payment network was discontinued in
2012 in favor of Maestro and V-pay debit cards.

The main problem with this is that many countries, even within the EU, don't
really issue Maestro and V-pay cards, but rather proper MasterCard and Visa
(debit) cards. In my experience it wasn't an issue in Amsterdam. In Brussels
on the other hand, I came across a couple places where I could only use my
Maestro card.

That said, the unbanked/underbanked population is probably a lot smaller than
in the US.

~~~
jypepin
Those pin card are Maestro "compatible" I guess. The card works where Maestro
is accepted, but not all Maestro cards work on those PIN systems.

source: I live in Amsterdam and have a Pin card, a US debit Mastercard, a US
Credit Mastercard, a dutch debut maestro and a dutch credit mastercard. Only
the pin works on those PIN systems

------
chrisseaton
Quirky related trivia point when talking about legal tender - Scottish bank
notes _aren 't_ legal tender, either in Scotland or anywhere else!

------
gnusty_gnurc
Honestly this seems like progressive posturing that's all too eager to pass
prohibitions than actually address the root of issues they're concerned about.

------
ada1981
The opportunity might be for generic in store cash -> debit card machines that
can be used anywhere.

~~~
ada1981
Unless the law says you can’t charge a fee for the debit cards...

------
JumpCrisscross
Couldn’t this be effectively curtailed by requiring exact change only?

------
ken
I admire the effort. Being poor is expensive.

I'd love to see big-picture legislation (like GDPR is for privacy) which could
take a bite out of all the tiny cuts of financial mini-hardship that poor
people face every day. I just have no idea what it'd look like. Maybe there's
nothing better we can do than 100 little laws like this one.

I encourage everyone to try living one day like they're down to their last $20
and have to buy some things they need (pretend you don't have a wallet full of
plastic cards and a phone full of passwords). Nearly every time you go to buy
something, you'll encounter a situation where you could save money in the long
run if only you had a little more to spend today.

------
huffmsa
Funny isn't it how these stores don't close when their POS system goes down
but are more than happy to take cash.

~~~
chrisseaton
Why's that _funny_? It's not like it exposes some hypocrisy or moral
duplicity. They'd rather not accept cash because it's bulky, dirty, slow, and
expensive to handle. But if they can't accept anything else for a large number
of customers for some reason they will go back to it.

~~~
Slartie
It is hypocrisy to a certain extent. Cash only works because people accept it.
It depends upon enough people accepting it, because only then enough of
physical cash will circulate in order to make maintaining all the
infrastructure (printing it, putting ATMs up, offering cash handling for
merchants etc.) cost-effective enough for it to be done.

If suddenly 95% of cash acceptance was dropped, a lot of that infrastructure
will vanish, forcing the remaining 5% to drop cash acceptance as well...a
death spiral, ultimately ending with the elimination of cash and thus also the
elimination of the very fallback that these stores mentioned by the OP relied
upon.

Consider the cost of accepting cash an insurance premium against technical
failures in the electronic payment networks and your POS systems.

------
Kaibeezy
Grande skinny matcha latte, please. $8.75? I’ve got a musket ball and this
shiny bead, will that cover it?

~~~
fenk85
Why the sarcasm? Here in Ireland a major bank was down for several days
because contractor of bank located in India screwed up a production deployment
or something, resulting in hundreds of thousands of transactions having to be
manually reconciled.

In that time people had no access to their money, no tap and pay, chip and pin
etc, nothing.

That was quite a lesson in importance of cash, another lesson was about a
dozen years ago when all the banks here went to the wall and had to be
nationalised in order prevent bank runs.

~~~
NeedMoreTea
Ireland famously survived a six month lock out by nearly _every_ bank in the
seventies, _with no harm to the economy._

Pubs were local guides to credit worthiness, larger shops cashed cheques so
businesses could pay staff (an era when many were still paid in cash), so cash
could go round the system again, and cheques were countersigned and passed on
dozens and dozens of times -- effectively becoming variable size bank notes.

It's a fascinating story, and quite remarkable how little effect no banking
had.

~~~
frereubu
I'd never heard of this - fascinating. For others who are interested, there's
a decent, referenced, account from the Bank of England's blog here:
[https://bankunderground.co.uk/2016/01/20/the-cheque-
republic...](https://bankunderground.co.uk/2016/01/20/the-cheque-republic-
money-in-a-modern-economy-with-no-banks/)

Doesn't sound like there was "no harm to the economy" though, except in the
broader sense. A quote from an Irish building contractor cited in the article:
"I employ only 10 people. If it hadn’t been for the bank strike I’d be hiring
30. I’d say I’ve lost up to £20,000 over it ... One of my problems is finding
the money to pay the wages. I run round from Wednesday to Friday to scrape
them up, and in that time I can do no other work."

~~~
NeedMoreTea
Oh sure, I've no doubt there were individuals and some businesses quite badly
affected, but look back at the overall growth, national and regional
statistics and the periods with strikes or lock-outs are simply undetectable
if not highlighted for you. Sales and growth figures weren't noticeably
harmed. No doubt if you were new to an area, didn't yet have a local or just
weren't a pub goer, you might have had more trouble than most.

The article also notes the steady stream of people going down to the local
department store and other larger shops once a week, to cash their wages, or a
wages cheque to pay their factory workers. Pubs were accumulating cashed
cheques from regulars and some making smaller loans.

The real surprise for me is how smoothly they coped, and how little fall out
there seemed to be when banks reopened. Though of course there were some of
the millions of cheques doing the rounds that did bounce. I've seen far less
about knock on effects after reopening like that, but it's usually described
in a way that makes it seem "far less than you would expect".

------
dsfyu404ed
I find this highly surprising (in a good way).

NYC is home to an industry that stands to benefit from a cashless economy and
home to a government that never seems to turn down an increase in their
ability to put people under a metaphorical microscope. I would have predicted
they would be one of the first places to ban cash and one of the last to
mandate businesses accept cash.

I'm really happy to see consumer protection winning out over private interest
for money and state interest for power but damn is that a curve ball in this
day and age.

