Home Merchant cash advance House task force assesses mandate of retail cash in the digital age | Payments Source

House task force assesses mandate of retail cash in the digital age | Payments Source

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Players in the payments industry are expected to give testimony on Capitol Hill on Thursday before a House FinTech task force evaluating a bill to ban stores from refusing to accept cash.

The hearing, focused on increasing mobile payments and how it affects access to cash, could align U.S. law with various states and cities that have recently cashless businesses banned.

New York City this month finalized a law requiring local businesses to accept cash, joining New Jersey, Philadelphia and San Francisco in blocking a trend where some stores trying to streamline checkouts, including Amazon Go stores , have avoided cash to the detriment of some consumers who lack payment cards.

Executives from PayPal, the US Faster Payments Council, Brookings Institute and Consumer Reports are set to testify in a live webcast on how mobile payments have changed the security and speed of everyday transactions.

The audience, “Is cash still king? Examining the rise of mobile payments”Examines the security and challenges surrounding mobile payments, but its primary focus is the need to preserve consumers’ ability to use cash, according to a note from the US Financial Services Committee promoting the event. .

An existing federal law specifies that U.S. coins and currency are legal tender for all payments, but it does not require private companies to accept cash, the memo notes.

“Recently, a growing number of business entities such as restaurants, retailers, and gas stations have taken advantage of the lack of the federal requirement to accept cash by requiring their customers to pay with credit cards or debit “, indicates the memo.

This trend presents difficulties for vulnerable segments of the population who are unbanked or underbanked and rely more on cash, the note notes.

The risks that mobile payments pose to the privacy and security of consumers of data-sharing businesses or cybercrime are also explored during the task force hearing, as well as the role that faster payments could. gamble to prevent consumers from overdrawing their accounts because a deposit was not immediately settled.

“Faster or more immediate payment processing could potentially reduce or eliminate the costs incurred by those faced with this situation,” the memo reads.

The memo points to a bill representing Donald M. Payne, DN.J. introduced in May 2019, called the Payment Choice Act, which would prohibit retail businesses from refusing cash payments, charging higher prices to any customer who pays in cash. The bill has so far gathered 34 cosponsors in Congress.

Currently, more than 75% of cash transactions in the United States are for purchases under $ 25, underscoring the ubiquity of cash despite the growing popularity of digital payments online and in mobile apps, the memo notes.

As m-payments grow, poor, young, elderly and rural Americans are at risk of being denied access to retail services, Brookings Institution member Aaron Klein said in testimony to the group. of work.

“As the economy goes digital, those without access to reliable, low-cost digital payments are increasingly unable to participate and share the benefits,” Klein said.

While cash still dominates the global payments landscape, its use is declining globally, countered Kim Ford, executive director of the US Faster Payments Council, in testimony submitted ahead of the hearing.

“Almost 80% of consumers own a credit or debit card,” noted Ford, adding that the constant movement of the United States towards real-time electronic payments increases the safety and liability of retailers and others, compared to to cash transactions.