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It May Soon Be Illegal For Businesses to Refuse Cash: An Update on the Payment Choice Act

Jul 19, 2022
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The Payment Choice Act was reintroduced to the House of Representatives in July 2021 by Representatives Smith and Payne and recently passed earlier this month making its next stop in the Senate. The goal of the Payment Choice Act is to preserve cash as an essential payment choice so customers have the freedom to choose how to pay for goods and services. This was brought on by the increased use of electronic and contactless methods of payment and many businesses began refusing cash as a viable payment method.

Today, cash still accounts for 19 percent of all payments and it is important to remember that cash still plays a vital role in society. In addition, this legislation would also prohibit retail businesses from refusing to accept cash as a form of payment and charging a higher price for using cash than for other forms of payment.

Now that the legislation passed in the House of Representatives, the Payment Choice Act has moved to the Senate with the backing of Senators Menendez (D-NJ) and Cramer (R-ND).

“While electronic payments are a convenient method for customers to pay for goods or services, completely refusing cash as a form of payment denies people, frequently in underserved populations, from having equal access to participate in our economy,” said Senator Menendez from a press release from his office on June 23, 2022. “Our bipartisan, commonsense legislation would guarantee everyone who carries legal tender printed and backed by the U.S. Treasury, and especially those who are unbanked or underbanked can continue to fully participate in the economy.”

Most American households have access to all or some financial services. However, 5.4 percent of households are unbanked, meaning they don’t have a checking or savings account, and 16 percent of Americans are underbanked, which means they rely on a variety of financial services, such as money orders, to make transactions.

“Prohibiting cash payments is an act of discrimination against the millions of Americans who do not have bank accounts or prefer cash,” said Senator Cramer in a press release from his office on June 23, 2022. “It also forces customers to exclusively use a less secure form of payment. The Payment Choice Act protects people’s right to participate in the economy using their preferred form of payment. If businesses unilaterally stop accepting cash, why do we print money? Is it really legal tender for all debts as it says?,” said Senator Cramer.

Prior to the Payment Choice Act, some states enacted their own laws to protect the right to pay with cash. In 2019, the State of New Jersey enacted a state law that makes it illegal for businesses to refuse cash as a payment option, and a similar law has existed in Massachusetts since 1978.

Cash provides all Americans with a low-cost, reliable, and private form of payment that consumers should always have access to, and the Payment Choice Act will ensure that all consumers in the United States can make purchases from retailers using the payment method of their choice. We would like to urge everyone to show support for the Payment Choice Act by contacting your state Senators here.

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