Sen. John Fetterman (D-PA) engaged in a bipartisan push to prohibit companies from eliminating cash payments, arguing that a cashless society harms “millions” who do not have bank accounts.
Fetterman joined Sen. Kevin Cramer (R-ND) in introducing the Payment Choice Act, which seeks to require brick-and-mortar businesses to accept cash up to $500 per transaction. The legislation would require in-person companies to take cash payments for bills under $50 and prohibit businesses from surcharging those payments.
“It’s simple: if you’re open for business in America, you should take U.S. dollars,” Fetterman said in a statement. “I’m proud to introduce the bipartisan Payment Choice Act with Senator Cramer because every American should be able to use paper currency if they choose. We have millions of people in this country who don’t have access to bank accounts, and they must be able to go shopping with their hard-earned dollars.”
The bill temporarily allows businesses to reject large bills, permitting them to turn away $50 or $100 bills for five years.
Companies that fail to comply with Fetterman’s legislation could be fined up to $1,500.
The Payment Choice Act seeks to rebuff a growing trend of businesses incentivizing cashless practices by declining to accept forms of payment other than card or digital. Contactless payments surged during the 2020 COVID-19 pandemic, and businesses stuck with it in the years since in efforts to cut costs, simplify transactions, and prevent crime. Americans going cashless have increased by double digits in less than a decade, according to 2022 data from Pew Research, which found 41% said they paid for none of their purchases with cash.
Businesses are allowed to regulate their policies on cash, which the Federal Reserve considers “legal tender,” because federal law doesn’t mandate that private businesses, individuals, or organizations accept bills or coins for payment.
“Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise,” the Federal Reserve website says.
Washington, D.C., along with states such as Oregon, New Jersey, and Massachusetts, are among the areas across the country that have enacted legislation requiring businesses to accept cash payments in at least some circumstances.
Fetterman and Cramer argue that federal incentives are needed to preserve inclusive payment options for the unbanked and underbanked.
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As of a 2023 Federal Deposit Insurance Corporation analysis, 4.5% of households do not have bank accounts or credit cards. The lawmakers have touted federal data showing that the demographic still represents nearly 20% of all payments in the U.S. economy.
“Cash is still legal tender in the United States, despite some businesses’ exclusive acceptance of electronic payments,” Cramer said. “Forcing the use of credit and debit cards or imposing premium prices on goods and services paid for with cash limits consumer choice. Americans should have the option of using cards or cash, but they should be the ones who make that choice.”