THE CASHLESS ECONOMY: FINANCIAL EXCLUSION
A growing number of businesses no longer accept cash, and many government agencies at the federal and state levels only issue payments via direct deposit or prepaid card, instead of offering paper checks. Without Congressional action, the trend of eliminating cash as a means of payment will continue unabated.
Yet millions of Americans, especially those who are underbanked or unbanked, prefer to pay in cash or receive paper checks for government benefits. |
..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." As a result, all U.S. money is a valid and legal offer of payment for debts when tendered to a creditor.
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Without these convenient options, consumers can experience additional, unwanted costs and consequences
and, in the case of government payments, endure delays in accessing critical benefits.
It is critical that all Americans have the choice of making and receiving payments by the means most convenient to them.
The Benefits and Inclusivity of Cash
The benefits of paying with cash are clear and well-established. Paying with cash:
• Is something everyone can do, regardless of income or status.
• Is essential for consumers who don't have bank accounts or credit cards.
• Provides more privacy than other forms of payment.
• Limits the risk of data breaches.
• Helps consumers budget and teach children financial responsibility.
The Consequences of a Cashless Economy
Cashless enterprises lock out millions of unbanked Americans of all ages from engaging in our economy and public commerce, including for fundamental living expenses. Many transactions, including, for example, rent payments, cannot be made with prepaid cards. Low-to-moderate-income consumers, ethnic and racial minorities, the elderly and the disabled are most impacted by these changes.
In addition to reducing payment options, a cashless economy exposes consumers to threats to their data privacy, including identity theft and data breaches. Citizens who value the anonymity of paying with cash, and who do not want to be burdened by the challenges of credit cards, interest rates, and corresponding debt, should have the option to pay with cash.
Support for Maintaining a Cash Option
Maintaining a cash option receives widespread public support throughout the United States. Within the past two years, the state of New Jersey and cities including Washington, D.C., Philadelphia, San Francisco, and New York City have adopted laws protecting consumers’ right to use cash. At the federal level, the bipartisan Payment Choice Act would prohibit cashless brick-and-mortar retail establishments, guaranteeing cash as a viable means of payment for most consumer purchases in the United States, and ensuring that consumers have the right to choose the manner in which they conduct their financial transactions.
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No Evidence COVID-19 Spreads on Currency Very early in the COVID-19 pandemic, uncertainty about the virus’s transmission led some to worry about whether it could be passed on surfaces, including currency. Since then, experts have confirmed that COVID-19 is unlikely to spread via cash or other items. The World Health Organization (WHO) specifically refuted reports suggesting that it had concluded that COVID-19 is spread through the use of cash. In addition, experts at leading academic and research institutions, including the Massachusetts Institute of Technology and the University of Washington School of Public Health, have reported that there is no concrete evidence that the virus can be readily spread on physical money or other surfaces. Cash remains a safe payment option and critical tool for many, including during the pandemic
and, in the case of government payments, endure delays in accessing critical benefits.
It is critical that all Americans have the choice of making and receiving payments by the means most convenient to them.
The Benefits and Inclusivity of Cash
The benefits of paying with cash are clear and well-established. Paying with cash:
• Is something everyone can do, regardless of income or status.
• Is essential for consumers who don't have bank accounts or credit cards.
• Provides more privacy than other forms of payment.
• Limits the risk of data breaches.
• Helps consumers budget and teach children financial responsibility.
The Consequences of a Cashless Economy
Cashless enterprises lock out millions of unbanked Americans of all ages from engaging in our economy and public commerce, including for fundamental living expenses. Many transactions, including, for example, rent payments, cannot be made with prepaid cards. Low-to-moderate-income consumers, ethnic and racial minorities, the elderly and the disabled are most impacted by these changes.
In addition to reducing payment options, a cashless economy exposes consumers to threats to their data privacy, including identity theft and data breaches. Citizens who value the anonymity of paying with cash, and who do not want to be burdened by the challenges of credit cards, interest rates, and corresponding debt, should have the option to pay with cash.
Support for Maintaining a Cash Option
Maintaining a cash option receives widespread public support throughout the United States. Within the past two years, the state of New Jersey and cities including Washington, D.C., Philadelphia, San Francisco, and New York City have adopted laws protecting consumers’ right to use cash. At the federal level, the bipartisan Payment Choice Act would prohibit cashless brick-and-mortar retail establishments, guaranteeing cash as a viable means of payment for most consumer purchases in the United States, and ensuring that consumers have the right to choose the manner in which they conduct their financial transactions.
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No Evidence COVID-19 Spreads on Currency Very early in the COVID-19 pandemic, uncertainty about the virus’s transmission led some to worry about whether it could be passed on surfaces, including currency. Since then, experts have confirmed that COVID-19 is unlikely to spread via cash or other items. The World Health Organization (WHO) specifically refuted reports suggesting that it had concluded that COVID-19 is spread through the use of cash. In addition, experts at leading academic and research institutions, including the Massachusetts Institute of Technology and the University of Washington School of Public Health, have reported that there is no concrete evidence that the virus can be readily spread on physical money or other surfaces. Cash remains a safe payment option and critical tool for many, including during the pandemic