Weeks before Philadelphia’s historic law banning cashless stores takes effect, government offices used by tens of thousands of city residents say they won’t accept cash as payment.
The Pennsylvania Department of Transportation (PennDot) said it will still refuse to take cash from city residents seeking driver’s licenses, permits, and identification cards, citing security reasons.
Meanwhile, SEPTA won’t let riders purchase transfers without a Key card, so cash-paying consumers must pay full price for each ride. And the Philadelphia Parking Authority may continue not accepting cash for residential parking permits at its Center City office.
The city can’t enforce its new ban on cashless stores on state entities, legal experts said, even if their policies would in effect be discriminatory as defined by Philadelphia lawmakers who outlawed cashless retail. The nation’s poorest large city became the first in the nation with its ban, but the starting troubles highlight the challenges faced by public policy that runs counter to the growing trend of shops and government offices going cashless.
“Concerns about equitable treatment — namely, ensuring access to services to all individuals, regardless of their economic status or access to banking services — should presumably apply even more strongly to the public’s interaction with their government,” said Cary Coglianese, a University of Pennsylvania law professor who specializes in public policy and regulation.
By contrast, businesses such as Amazon and Sweetgreen have already announced they will reverse course and start accepting cash following Philly’s ban and similar ones in New Jersey and San Francisco.
In February, Mayor Jim Kenney signed off on the law that prohibits most retail locations from refusing to take cash or charging cash-paying customers a higher price. Proponents of the new ban argue that cashless stores effectively discriminate against poor consumers who do not have access to credit or bank accounts.
Nearly 6 percent of residents in the Philadelphia region were unbanked in 2017 and roughly 22 percent were considered “underbanked,” according to the Federal Deposit Insurance Corporation.
The law, which takes effect July 1, carves out some businesses, such as wholesale clubs and parking lots and garages. Violators can face fines of up to $2,000.
But PennDot’s driver’s’ license centers in the city still won’t accept cash, a department spokesperson said Wednesday. The five city locations take checks, money orders, and payment cards. The offices processed roughly 23,000 new permits and IDs and about 63,000 renewals in 2018, according to PennDot. Initial permits and four-year licenses cost $35.50.
“For security reasons, PennDot has historically not accepted cash at any of its field locations,” department spokesperson Melanie Baldwin wrote in an email, noting the city ordinance does not apply to state agencies.
Just as states can’t regulate the federal government, cities can’t regulate state agencies because they are subsidiary to states, Coglianese, the Penn law professor, said.
It’s unclear whether the Philadelphia Parking Authority will accept cash at its Eighth Street office in Center City, which stopped taking paper money for parking permits in February 2018. That is the only site where customers can walk in to buy residential parking permit stickers, though applications are available online.
The authority issued 68,406 residential parking permits in 2018, only 4,746 of which were done online, according to the PPA. Fees for the permits start at $35.
A spokesperson for the law’s sponsor, Councilman William Greenlee, said the councilman’s staff plans to meet with the authority in the “near future” to discuss the issue. The mayor’s office referred queries to the Commerce Department, which said it can’t confirm any potential exemptions as regulations are still being finalized.
PPA spokesperson Martin O’Rourke declined to say why the authority office went cashless but said the PPA would comply if the city directs it to take cash.
SEPTA has been criticized for ending sales of paper transfer slips last August. Transfer slips allowed travelers to shift between modes of travel, from a bus to a subway, for example, for $1. Even that low fee is a cause for concern for transit advocates and city officials, which are urging SEPTA to eliminate the transfer fee entirely.
But now, the $1 charge is only available through rides paid for through a SEPTA Key fare card. Riders can pay for a Key card with cash but can’t pay for just a transfer slip anymore with cash.
SEPTA disputed that eliminating the transfer slips equated to a ban on cash transactions, since a rider can buy a Key card with cash.
“All our sales offices take cash,” said Andrew Busch, a SEPTA spokesperson. “I don’t think we would consider anything cash-free.”
He noted SEPTA was working to shrink the minimum initial balance riders are required to put on a Key card when they don’t use a monthly or weekly plan. Currently, a rider must pay $4.95 for the card and an additional $5 for a minimum initial balance, an amount that could be an obstacle to a poor rider. SEPTA has pilot programs underway, though, to reduce the minimum initial balance to $1.
Lance Haver, policy director of Pennsylvania Save Our Safety Net Coalition, a group advocating for government social services, has been vocal in his concerns about the people excluded by cashless government offices, particularly in regards to SEPTA. He still sees the end of transfer slips as a violation of the city’s ordinance because it requires cash to be accepted at a point of sale.
“The law is very clear, and SEPTA is very clearly ignoring the law,” he said. “The question for the City of Philadelphia and its board members is do they care enough about the working poor to actually enforce the city’s laws.”
He saw any government office that doesn’t take cash as behaving as though it’s above the law, but said it is particularly troubling for SEPTA, whose users include many people without much money who take trains, buses, or trolleys every day.
About a third of all SEPTA’s riders are from households that earn less than $25,000 annually, according to the transit agency’s latest budget.