Read the below passage and answer the questions that follow.
After almost 10 minutes of standing in line at a coffee shop, Ritchie Torres realised he only had cash in his pocket- a form of payment no longer accepted by this store. ”It was a humiliating experience,” he said. ”I remember wondering aloud, how could a business refuse to accept cash, which is legal tender?” Torres is a City Council member in New York. He says his constituents, especially seniors, have also complained about a spurt of cashless stores. So, Torres led the charge on a bill to ban businesses from rejecting cash.
”A cashless economy is not an inclusive economy,” said Tazra Mitchell, Policy Director at the research and advocacy group DC Fiscal Policy Institute. Excluding people from paying with cash means, ”essentially discriminating against people who are low-income, people who are homeless, also undocumented,” she said. Getting a credit or debit card often requires a form of ID, a utility or another bill, money to deposit and a financial history. Mitchell said that in Washington, D.C., nearly a third of residents rely on cash every day because they don’t have a card or even a bank account. In fact, as cities have cracked down on the cashless economy and spurred new conversations about whom it leaves out, some of the biggest names that tried going cashless... have reversed their policies in favour of accepting cash. Credit card companies, which get a cut every time a card is swiped, have rewarded the cashless trend. For example, in 2018, Visa paid $10,000 each to 50 businesses that stopped accepting cash. And some store owners have argued, cash is inefficient. For example, it slows down the line, requires armoured cars, and attracts break- ins or skimming by workers.
And indeed, cash is becoming less popular among U.S. shoppers. The Federal Reserve found in 2018 that cash had stopped being the No. 1 payment choice overtaken by debit cards. But cash is still the most common way people pay amounts under $10 or $25-especially among those older than 55 and younger than 25. And some people prefer cash for privacy reasons to protect their purchase history from being tracked by advertisers or banks.
Cash also might carry potential psychological and financial benefits for consumers. Cash is, ”going to feel much more painful to give up because we can see it outflow from our hand,” said Avni Shah, Assistant Professor of Marketing at the University of Toronto. Her research found that when people pay in cash, they are more mindful of their spending willing to spend less to begin with- but they also value their purchases more and feel more loyal to the seller.
Shah acknowledged that different businesses may have priorities other than loyalty, such as convenience and speed of getting the customer in and out of the store. Opponents of the bans on cashless establishments have argued that businesses should be able to make these decisions for themselves.
