Mobile Payments Heavy Stores Facing Increased Backlash
With the concept of cashless retail on the rise, it would be easy to think that the entire market is going in that direction. That’s actually not too far from wrong, but it’s not coming without a cost. In fact, there’s a growing backlash against purely cashless retail, where mobile payments rule the day, and even some legal challenges rising therein.
We heard not so long ago about a move from the Chinese central bank, which reminded retailers that cash was still legal tender in China. Now, we hear about a similar move being staged by New Jersey legislators, who recently passed a bill that required retailers, by law, to accept paper currency. It needs to be signed by the governor, reports note, so it’s not a completely done deal yet.
It also won’t be the only one; Philadelphia’s city council is working on a similar law, and the state of Massachusetts has actually forbidden businesses to refuse cash since the 1970s, in which a law was passed that made clear retailers could not “…discriminate against a cash buyer by requiring the use of credit.”
Reasons for such measures vary. In New Jersey, for example, cashless stores have the potential to shut out customers who don’t have access to credit, or have bank accounts for debit cards. Recent commentary from Fortune magazine echoed another major concern, that cashless transactions create “frictionless” spending which could damage budgeting.
Yet those in favor of cashless transactions have valid points as well, like the improved safety and efficiency that comes with leaving cash behind. No more deposits, potential theft, or even illness. Moreover, many cashless businesses are responding to customer interest, particularly that of millennials and young Gen Xers. Those in the 25 to 44 age bracket use cash just 25 percent of the time.
At the end of the day, it’s a bad idea to completely eschew paper currency. Even for businesses targeting millennials, 25 percent of them still use cash. There are even signs this is a temporary aberration, as Gen Z shoppers are shown to have some preference for paper currency. It’s seldom a good idea to abandon entire classes of shoppers, so keeping in mind that cash is the first mobile payments tool is worth doing.