Letters to Congress: Letter in Support of the Payment Choice Act of 2021

Rep. Donald Payne, Jr.106
Cannon HOB
Washington, DC 20515

Rep. Sylvia Garcia
1620 Longworth HOB
Washington, D.C. 20515 

Rep. Chris Smith
2373 Rayburn HOB
Washington, D.C. 20515 

August 5, 2021

Re: Support for the Payment Choice Act of 2021 (H.R. 4395) 

Dear Representatives Payne, Smith and Garcia, 

As advocates for the rights and interests of U.S. consumers, we are writing to express  our support for the Payment Choice Act (H.R. 4395)—legislation you have introduced as  original co-sponsors to preserve the option for people to pay for purchases with cash at  retail locations. 

According to the FDIC’s Report on the Economic Well-Being of U.S. Households in 2020  (May 2021), 18% of adults in the U.S. are unbanked or underbanked, meaning  approximately 37 million adults may lack access to digital forms of payment, including  credit or debit cards. This problem is worse for minority households; approximately 13%  of Black households and 9% of Hispanic households had no bank accounts at all in 2020,  according to the FDIC report. Adults with less education and adults with lower income  were more likely to be underbanked than the population as a whole. Nearly one-fourth  of those with less than a high school degree and 21% of those with incomes less than  $25,000 were underbanked. 

All consumers should have the freedom to choose to pay with cash at grocery stores,  restaurants, and businesses. Unbanked and underbanked consumers have little access  to noncash forms of payment, with the possible exception of prepaid cards.  Furthermore, when consumers are forced to pay for goods and services in cashless  transactions, they (as well as the businesses where they shop) are also often forced to  incur added expenses in the form of network and transaction fees. 

Another concern is that noncash transactions generate vast amounts of data, recording  the time, date, location, amount, and subject of each consumer’s purchase. Those data  are available to digital marketers and advertisers who are engaged in developing and  refining increasingly sophisticated techniques to identify and target potential customers.  Paying with cash provides consumers with significantly more privacy than do electronic  forms of payment. That is why even consumers who have credit and debit cards  sometimes prefer to pay with cash. 

A 2021 study sponsored by Cardtronics, independently produced by Javelin Strategy &  Research, found that during the pandemic, cash rebounded faster than other payment  methods and remained the top way to make a purchase throughout 2020. Among  underbanked consumers, cash usage was significantly higher and steadier than among  average consumers, remaining at 78% usage throughout 2020, significantly higher than  the credit card (59%) and debit card (53%) usage seen in October 2020. The study  concluded that cash’s standing has remained strong—the majority of consumers  surveyed agreed that: cash protects my privacy and financial security (66%); allowing  people to pay in cash is important for society (63%); cash is safe to use (58%); cash is as  important today as it ever was (54%); cash is often the easiest way to pay (44%). 

To protect consumers from discrimination and ensure that they have choices in  payment methods, some cities and states have enacted laws or ordinances that bar  brick-and-mortar retail stores from refusing to accept cash. States such as New Jersey,  Massachusetts and Rhode Island have laws in place that prohibit businesses from  banning cash. San Francisco, Philadelphia and New York City also have passed similar  laws. 

Some have used the pandemic as an excuse for not accepting cash, claiming it is unsafe.  Expert sources, however, have stated that currency does not present any increased risk  of COVID-19 transmission compared to plastic payment cards. According to a 2013 study  published in the Journal of Applied and Environmental Microbiology, American  currency, a porous surface, had an extremely low rate of virus transfer efficiency:  between 0.05% and 0.2%. Nonporous surfaces, such as hard plastic countertops and  credit card readers, had a transmission efficiency rate of up to 79.5 percent. Neither the  World Health Organization (WHO) nor the Centers for Disease Control and Prevention  (CDC) have concluded that cash presents any more danger than credit cards or other  forms of payment. 

What is true about the pandemic is that the economic dislocations it has caused have  fallen most directly and most harshly on the marginalized segments of our society: low income populations, people in inner-city neighborhoods and in rural areas, the  unemployed and underemployed, the elderly, and racial and ethnic minorities. It is  crucial for people to be able to obtain necessities at their local stores and restaurants  without being turned away because they want to pay with cash. 

Enactment of the Payment Choice Act will ensure that all consumers in the United  States can make purchases in retail stores and restaurants using the payment methods  of their choice. We appreciate your leadership on this important issue, and urge your  colleagues in Congress to support this legislation.  

View or download a PDF of the letter here.