As Amazon leads cashless charge, US states push back

Bloomberg

Rebecca Esparza works with homeless people and, having once lived in a shelter herself, knows what it’s like to navigate the US economy if you don’t have much money. For most of her clients, cash is king because they lack access to the financial tools many Americans take for granted—checking accounts, debit cards, payment apps.
Esparza worries that the growing number of cashless stores and restaurants around the country will further marginalise low-income people at a time when inequality is already the highest in more than half a century.
“We just forget just how poor the poor can actually be in this country,” says Esparza, who works at the Lawrence, Kansas, affiliate of the nonprofit Family Promise and once sold her blood to support herself and her five children. “I could totally be part of that cashless system today, but it would totally
discriminate.”
Legislators around the country agree with Esparza and are taking steps to halt or slow the steady march towards a cashless society. Earlier this month, New Jersey passed legislation banning many kinds of cashless stores, joining Massachusetts, which has a 1978 law prohibiting discrimination against customers opting to use cash, and Philadelphia, which adopted a similar law in February. San Francisco has proposed a ban on stores like Amazon Go and Nestle-owned Blue Bottle coffee shops, which don’t accept cash.
Ritchie Torres of the New York City Council is leading
efforts to ban cashless retail there, and lawmakers in Chicago and Washington have considered similar proposals in recent years.
Proponents of cashless stores tout various benefits. Electronic payments save employees the time it takes to collect, store and transport cash. Theft is less likely. Customers typically move faster through checkout lines because they don’t need to count out their cash and wait for change.
Some argue that technology, having helped usher in cashless payments, can provide a solution. Companies like Square Inc and PayPal Holdings Inc offer payment services that don’t require a bank account; they’re gaining some traction with
the working poor and could eventually provide an alternative to banning cashless stores outright.
The vast majority of US retailers and restaurants currently accept cash. And those that don’t often cater to wealthier customers. The best-known example is Amazon Go, a chain of cashierless convenience stores that carry upscale fare like artisanal cheeses and locally made chocolates.
Amazon.com Inc operates only 10 Go stores in three cities, but eventually could open as many as 3,000, according to people familiar with the matter.
The fear is that if cashless shopping catches on, more and more retailers will follow suit. Many local restaurants are no longer accepting hard currency because handling cash can add as much as 10 percent to overhead costs, says Richard Crone, chief executive officer of payments expert Crone Consulting LLC. In five years, he says, a third of all retail will be cashless, up from about 17 percent today. About 10 percent of brick-and-mortar stores will be cashless, up from less than 1 percent today, he says.