Ask Axios: What's the deal with "cashless" businesses?
Welcome to Ask Axios, where we answer your questions about the Columbus area.
Reader Nico asks: Can businesses legally refuse to accept cash for payment of goods and services? … Does the pandemic-accelerated trend of moving cashless overstep the laws on banking and money in the U.S.?
First things first: Cash is "legal tender" in America, but businesses do have the right to refuse it and require digital payment.
- We've seen Ohio restaurants, amusement parks and even Columbus City Schools make the shift for its sporting events.
Why it matters: Fewer and fewer people use cash in their daily lives, though cashless businesses can impact millions of "unbanked" Americans who lack credit or debit cards.
- The rate of "unbanked" households is highest among communities of color, lower-income earners and those with disabilities, according to the FDIC.
What they're saying: Going cashless is more efficient for businesses, wards off theft and can lower operational costs, former Ohio State University economist Jay Zagorsky wrote back in 2016.
- In pandemic times, cashless payments are contact-free and avoid the widespread coin shortage.
State of play: Places like Nationwide Arena have tried to accommodate those still relying on paper money with "reverse ATMs" that load cash onto cards used at concession stands.
- The Central Ohio Transit Authority is transitioning to a digital payment system, with riders able to put cash onto "Smartcards" at hundreds of vendors across the region.
Meanwhile, places like New York City have outlawed this practice and require businesses accept cash.
- There have been no local discussions on enacting such a ban here, Columbus City Council press secretary David Miller tells us.
Of note: State Sen. Louis Blessing III of the Cincinnati area sponsored a bill earlier this term requiring Ohio retail merchants accept cash.
- Exceptions would be given to large entertainment venues along with transactions conducted over the internet, telephone or mail.
- The ACLU and Ohio Poverty Law Center support the bill, but it has made no legislative progress in recent months.
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