Does it matter how you pay? Consumer advocates cite privacy, emergency preparedness as case for cash

SAN FRANCISCO — San Francisco’s tech community embraced cashless transactions. So some businesses went from accepting alternatives to cash to rejecting cash payments altogether. The San Francisco Board of Supervisors intervened, passing an ordinance requiring businesses accept cash.

“I always say ‘cash is king,'” says former San Francisco Supervisor Vallie Brown. “If you have cash, you should be able to go wherever you want.”

Now Congress is following the city’s lead, The Payment Choice Act (H.R.4395 – 117th Congress (2021-2022): Payment Choice Act of 2021), would require brick-and-mortar businesses accept payments made in dollars and cents.

“I think that right now, this topic of cashless businesses and the use of cash is really very interesting to people,” says Consumer Action’s Linda Sherry, “and I’m hoping that the bill does move at some point soon.”

MORE: Is cash king? New bill in Congress would require retailers to accept cash

The FDIC says a quarter of U.S. households are part of a vulnerable population that is unbanked or underbanked. For millions, that means they have no way to pay except cash. Even many who can’t imagine being part of a vulnerable population can land in that category. When Hurricane Ian hit Florida, many ATMs were swamped, broadband went out and cash was suddenly king.

Dr. Scarlett Heinbuch is a payment risk expert with the Atlanta Federal Reserve Bank. She says, “In times of crisis, such as in a war or hurricane, or whether it’s man-made or natural disaster, the ‘go-to’ for people is cash.”

Dr. Heinbuch has written several pieces about the Payment Choice Act for the Atlanta Fed Blog.

The Federal Reserve doesn’t comment on pending legislation and so the Fed does not take a stand,” she tells 7 On Your Side.

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However, the Fed is aware and watching.

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“What the Fed does do, though, is look at these policies, and these issues from a holistic viewpoint, and try to understand how people’s needs in the payment system on both sides,” Dr. Heinbuch says. “Whether it’s the consumer or the business, how they are building this relationship so that everyone can succeed in an economy that truly does work for everyone, whether you’re providing a business or wanting to use that business.”

The smooth and equitable running of the economy. For many, that choice is privacy, which often means cash.

MORE: The move to a cashless society because of a pandemic

“One that doesn’t get as much attention as privacy,” Consumer Action’s Linda Sherry tells 7 On Your Side. “When you use your debit card or your credit card, these companies are tracking what you’re buying and using that information to pitch products to you and send you emails and other communications about things they’re trying to sell to you, so a lot of people would rather not have that happen to them.”

The sticking point now is the Senate, where this bill has not been taken up.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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