Philadelphia City Council members advanced a bill on Tuesday that would prohibit most city stores from going cashless.
The Law and Government Committee approved the bill by 4-1 after a hearing. The bill would prohibit retail locations from refusing to accept cash or charging cash-paying customers a higher price. Violators could be fined up to $2,000.
The legislation now goes before the full Council for consideration. The earliest it could be voted on is Feb. 14.
As technology gives consumers more ways to pay, including with their smartphones, some stores have gone cashless to improve efficiency, avoid the hassle of handling cash, and reduce the risk of robbery. In Philadelphia, that includes the salad chain Sweetgreen and Bluestone Lane, a coffee shop.
But proponents of the bill argue that cashless stores effectively discriminate against poor consumers who do not have access to credit or bank accounts, especially in a city with one of the highest poverty levels in the country. Nearly 6 percent of the Philadelphia region was unbanked in 2017 and roughly 22 percent was considered “underbanked,” according to the Federal Insurance Deposit Corporation.
Most speakers at the hearing supported the bill, but even proponents said a ban should not be permanent. Some said a cashless economy is inevitable, but a “pause” is needed to get more people into bank accounts.
“It’s about making sure that all of our citizens are included in our future,” said Kevin Thomas Jr. of Drexel University’s Center for Hunger Free Communities. “This bill stops discrimination and gives innovation and exclusion a chance to catch up.”
Sylvie Gallier Howard, first deputy director of the city Commerce Department, said there are about five businesses in Philadelphia that are currently cashless, less than many other major cities. But she said the department is confident that the cashless business model will proliferate.
“At some point, probably in the near future, a ban on cashless businesses could impact our competitiveness as a city, which would negatively impact those that are already the most disadvantaged,” she said. “We must prepare our city for the rapid pace of modernization.”
New Jersey lawmakers passed a similar bill last week to ban cashless stores statewide, sending the proposal to Gov. Phil Murphy.
In Philadelphia, lawmakers amended the bill to carve out some businesses from the proposed ban. Parking lots and garages, wholesale clubs, retailers with membership programs, and rental companies could still refuse to take cash if the ordinance is adopted. Sales made by phone, mail, and online would also be excluded, as well as goods and services sold exclusively to employees.
Councilman David Oh, a Republican, was the lone vote against the bill.
“I oppose the bill primarily because I don’t think it’s the role of government to tell business what to do,” he said. He noted there are costs associated with handling cash, and argued that allowing businesses to go cashless would let them lower prices for consumers.