Payments
Where do we stand on cashless laws?
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June 10, 2025 by Bradley Cooper — Editor, ATM Marketplace & Food Truck Operator
Cash has certainly taken multiple hits over the years, due in no small part to COVID-19 and increasing usage of usage of other payment options. In addition, with many businesses considering going cashless, both the ATM industry and other groups have raised concerns over the years of cash users being left behind.
This is by no means an unfounded fear as when retailers stop accepting cash payments, the unbanked, underbanked, senior citizens and others can be left unable to pay. However, with recent legislative moves on the state level, that may be changing. Let’s take a look at the current federal and state landscape.
The current federal landscape
Currently, there is no federal law mandating cash acceptance for businesses.
The Federal Reserve website states, ” There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.”
There has been a proposed law for several years that was reintroduced on Feb. 7, 2025 by Congressman John W. Rose called the Payment Choice Act of 2025. This bill has bipartisan support as well, with five Democratic and three Republic co-sponsors, all of whom are on financials services committees.
The aim of the bill is to prohibit retailers from denying cash payments.
The bill broadly defines a retailer as, “any person engaged in the business of selling or offering goods or services at retail to the public who accepts in-person payments at a physical location… shall accept cash as a form of payment for sales made at such physical location in amounts up to and including $500 per transaction.”
It further states these businesses cannot charge higher prices for customers paying with cash.
It does list a few exceptions such as due to:
- Not having enough cash on the premises.
- System issues.
- There’s a mechanism to convert cash into a prepaid card that doesn’t charge a fee.
- Retailers don’t have to accept bills of $50 or larger.
The bill is in the introductory phase and must go through committees.
State/local laws
As the Federal Reserve states, retailers must follow local and state laws and there are several that ban cashless only retailers.
Berkely, California passed an ordinance in 2019 requiring all drugstores, food stores and retailers to accept cash. San Francisco passed a similar law in 2019 aiming to protect unbanked individuals.
Lexology mentions several states that have passed bans including:
- Colorado.
- Connecticut
- Delaware.
- Montana.
- New Jersey.
- Oregon.
- Rhode Island.
Much like the proposed federal law, several state laws also include exceptions. For example, the Montana bill from 2023 specifically mentions prepaid cards as a mechanism if the store allows customers to convert cash into a card onsite.
New York leads the way
New York is the latest state leading the way in the cashless battle. Senator James Sanders and Assembly Member Catalina Cruz co-sponsored a bill, which passed both Houses, that aims to protect populations that rely on cash.
“No one should be denied a sandwich, a bottle of water, or a loaf of bread because they don’t have a debit card. This bill is about fairness and basic dignity,” Sanders said in a press release on the bill.
Bruce Wayne Renard, executive director of the National ATM Council Inc., said the bill also has a number of exceptions including a reverse ATM for converting cash into a prepaid card.
He said in a phone interview that the bill has a more “detailed handling of the exception” such as requiring businesses to accept cash if the reverse ATM malfunctions.
“It’s very important when a high profile state like New York endorses this policy. It’s taken notice by other states. It’s taken as a bellwether,” Renard said.
The ultimate solution
One big issue with the state laws is that they lead to what Renard refers to as a “balkanized system,” when everyone would benefit from clarity, especially national retailers.
“It is emblematic of a larger movement by localities and states to adopt these cash acceptance laws in the vacuum that has been created the absence in the actual law. That is unusual in that we are talking about legal tender, which is U.S. currency and yet the federal authorities have yet to act to make it crystal clear that legal tenders means legal tender,” Renard said.
Ultimately he argues the issue isn’t about individual states or even the U.S. but rather the reputation of the U.S. dollar.
“It’s difficult to expect the world to continue considering the U.S. dollar as the leading world currency when it’s accepted here,” he said.
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