Federal Reserve paper looks at the trend, impact of cashless businesses


The Federal Reserve’s Cash Product Office examines the impact of cashless businesses on retailers and consumers in a new white paper.

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The paper, “Cash Me If You Can: The Impacts of Cashless Businesses on Retailers, Consumers, and Cash Use,” looks at why some businesses consider going cashless and how this decision impacts consumer choice.

“This paper highlights one of the areas within our dynamic and ever-changing economy that could impact both the overall use of cash as well as the choices available to consumers when paying for goods and services,” Alex Bau, director of Data and Policy Analysis in the Federal Reserve’s national Cash Product Office, said. “As retailers seek to manage and control the costs associated with accepting a range of customer payment options, we encourage a discussion about the benefits and risks of cashless businesses so that both consumers and retailers can make thoughtful decisions about what they do at the register.”

The paper points out that cashless businesses span a variety of industries, including airlines, restaurants, sports stadiums, and general merchandise stores. Most are small- and medium-sized businesses. They have eliminated cash as a payment option, in part, to reduce operational costs associated with cash handling. It’s worth noting that some states and cities – including San Francisco and Philadelphia — have passed legislation that requires all retailers to accept cash. Some policymakers say refusing cash excludes unbanked and underbanked consumers from purchasing goods and services.

The Cash Product Office will continue to monitor the legal landscape around cashless businesses as well as trends and changes in the retail space.

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