Are we moving toward a cashless, checkless society?

Paul Dickson pulled out a $20 bill recently when he was at a baseball game at Camden Yards and wanted to buy a beer.

Another guy in line started laughing "because there's no place in the ballpark where you can spend cash," said Dickson.

Dickson, 85, who is an Orioles fan while his son and grandson are Nationals' fans, paid for the $17.50 beer by credit card. He knew that the Nationals' home stadium, Nationals Park, had become a cashless stadium, but he didn't know other baseball stadiums, like Camden Yards also stopped accepting cash.

Dickson, a book author, is not opposed to using his credit card or other methods of payment. Before he moved to an independent living facility, he had most of his bills on auto pay from his checking account. He still writes a check occasionally and he's had a Paypal account for years.

But Dickson said he's offended that his choice to use cash where he wants is slowly becoming more limited.

"It's not that I'm livid. It's not some injustice, but it's sort of this thing where I say 'Wait, it's my money. I'll pay you however I want,' " said Dickson. "It's almost like they're (businesses) saying 'Well, we're removing an option, which is for our benefit."

Are cash and checks on the way out?

Cash and checks, the dominant forms of currency for generations, are now increasingly not welcome.

Like Camden Yards, most Major League Baseball stadiums and many other professional sports arenas have gone cashless.

In March, the National Park Service was sued by three people when they couldn't use cash to enter some national parks. The agency announced in 2023 that dozens of its sites would no longer accept cash for entry because the U.S. Treasury had created policies to reduce the amount of cash and checks handled across the federal government. The lawsuit is ongoing.

Stores using Amazon's Just Walk Out technology, which include third-party stores at NFL stadiums, college campuses and airports, do not accept cash or checks. Amazon Go convenience stores started accepting cash in 2019, but do not accept checks, according to a spokeswoman. Similarly, Amazon Fresh grocery stores accept cash, but not checks.

"There is a war on cash," said Jay Stanley, a senior policy analyst with the Speech, Privacy, and Technology Project with the American Civil Liberties Union.

Cash is not king

More businesses became cashless during the COVID-19 pandemic, citing the need to protect their workers' health by not requiring them to exchange paper money and coins with the public, said Bankrate Senior Industry Analyst Ted Rossman. But some businesses were already moving in that direction, saying a no-cash policy was more efficient for operations.

"Speed and convenience tend to be the main explanations, especially with most stadiums that have gone cashless," said Rossman. Businesses "typically do it under the guise of 'Oh, this is going to be faster for everybody, the staff is not going to have to count bills and coins and you can just kind of speed the line through.'"

Cash is also costly to businesses, Rossman said. Employees need time to balance cash registers at the end of a shift and there are costs associated with the business getting the cash to the bank, either via an employee or an armored vehicle service, he said.

Businesses handling cash also have the added potential worry of robberies, either by outside criminals or employees who steal, Rossman said.

Some businesses are also rejecting payments by check. Target became the latest retailer to stop accepting checks in its stores on July 15, citing low usage. Aldi and Whole Foods also do not take checks.

Cash has its benefits

But cash remains an important option for consumers, some advocates say.

"Cash is needed for choice, for privacy, for equity and for access," said Ruth Susswein, director of consumer protection for Consumer Action, a national education and advocacy organization.

Susswein was recently in Atlanta and saw a sign on an ice cream shop. It read: "We accept whoever you are, but we don't accept cash."

Consumers should be "allowed to decide how we want to pay," Susswein said.

Use of cash, checks is declining

The use of cash and personal checks has dropped in recent years while credit and debit card payments rose, according to the latest 2024 Diary of Consumer Payment Choice, put out yearly by the Federal Reserve Financial Services FedCash Services.

Among the study's findings:

• Cash was most used by consumers for in-person shopping. It also is the preferred payment method of consumers in low-income households and those 55 years old or older.
• Consumers younger than age 55 used cash for just 12% of payments in 2023, compared to 22% for those age 55 and older. Also, for the first time in the Diary's history, cash was not the most-used instrument for smaller-value payments of $25 or less.
• Cash carried in a consumer's pocket, purse or wallet averaged $74, compared to $60 before the pandemic.
• Consumers living in households with income of less than $50,000 a year used cash for 28% of payments, compared to 13% for households with annual income of more than $50,000.
• Use of personal checks declined to 3% of payments made in 2023, down from 4% in 2021 and 2022, and 7% in 2020. Automated Clearing House (ACH) payments, or electronic check payments, accounted for 13% of payments.

The study, conducted in October 2023, was the first one since the Centers for Disease Control declared the end of the Covid-19 emergency in May 2023 - a period when some consumers got increasingly used to digital and online payments while hunkered down at home and paying for goods and services remotely.

Results of the study, its authors said, "indicate that the pandemic had lasting effects on how consumers made payments."

Kennedy Ream, 23, from Indiana, said she used to use cash a lot more when she was a teenager. But for the last four years, she has been using her credit cards.

"I don't take time out of my day to go to the bank to take cash out," she said.

Tony Brunner of Virginia said it's so much easier to use credit cards and digital apps, and he doesn't have to go to the bank.

"I'm on board with the digital economy," Brunner said, who uses his phone and Google wallet for most payments.

The rise of plastic

Since the 2016 Federal Reserve Diary of Consumer Payment Choice, credit card payments have nearly doubled, increasing from eight payments in 2016 to 15 payments in 2023. Cash payments have decreased 50% over the same period, declining from 14 payments in 2016 to seven in 2023.

Increased debit and credit card use between 2022 and 2023 resulted in more than60% of payments being made with credit (32%) and debit cards (30%).

Is a business required to accept cash?

Despite the printed words on money, which says "this note is legal tender for all debts, public and private," businesses are not required by law to accept cash, according to the Federal Reserve.

"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," the Federal Reserve says on its website. "Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise."

Jay Zagorsky, an economist and associate clinical professor at Boston University's Questrom School of Business, explains it further: the key word is "debt." If a business notifies you ahead of time that it does not accept cash, then you haven't gone into a debt, he said.

For instance, many airlines have gone cashless for any purchases during a flight, requiring a credit or debit card. If you only have cash, they won't sell you a beer and there won't be a debt, said Zagorsky. Similarly, if a gas station says it doesn't accept cash, you don't pump the fuel, so you don't have a debt, he said.

"There's no debt incurred, so they can actually quite legally say sorry" no cash, said Zagorsky, who has a forthcoming book called "The Power of Cash, why using Paper Money is Good for You and Society."

Some businesses remain cash only

And yet, there are also businesses that only want payments in cash.

In recent weeks, Dickson says, he's gone to his favorite pizza place near his home in Kensington, Maryland, and his barber. Neither will take a credit card - only cash – or a check, though they prefer the former.

"It's like transitioning from one world to the other," Dickson said.

In some areas, businesses are legally required to take paper money or have been pushed to do so by customer demand.

Sweetgreen, a national salad chain, reversed its cashless policy in 2019, and again began accepting paper money after customer backlash.

Meanwhile several states, including Massachusetts and Colorado, and cities, like New York, Philadelphia and Detroit have passed laws banning businesses from going cashless, and many others are considering similar legislation.

Some of the laws have exceptions, such as allowing large stadiums to go cashless, or having requirements for a reverse ATM to convert cash to a prepaid debit card. Businesses that violate the cash ban laws can face fines. And some of those reverse ATMs can come with fees, Rossman said.

Lawmakers said the requirement was put in place to protect consumers' rights to use cash.

And advocates emphasize that cash continues to serve a vital purpose, from being the only means many Americans have to pay their bills, to being a critical back up when electronic systems are down after a natural disaster.

Credit cards can cost extra

The increase in credit card usage and businesses who raise all prices to cover credit card fees is hurtful to all consumers, said Stanley.

Instead, it's more equitable to have the individual customer using a credit card pay the accompanying fee, Stanley said.

Cash helps consumers budget, spend less

Paying with cash can also help consumers save, said Zagorsky.

"Using cash helps people spend a lot less money," said Zagorsky. It's called the pain of paying, he said. When people have to give up cash at the register, it hurts a bit, while swiping the credit card isn't as tangible, he said.

An example Zagorsky gives: he recently went into a liquor store to pick out a $35 bottle of wine he knew he wanted for a dinner party. But he realized he didn't have enough cash when he walked in the store.

"I walked out with five bottles of wine and I spent $150," said Zagorsky, who used his credit card. "Because I was no longer suddenly constrained, I was like 'Oh, that looks interesting, How about this one?' "

Lack of cash payment options hurts poor, unbanked

Limiting where people can spend cash causes disparities and difficulties for consumers in lower income brackets, many of whom may not have access to a bank account, and who are disproportionately from marginalized communities, said Stanley.

"Going cashless is bad for privacy. It's bad for low-income people. It's disproportionately bad for people of color, it's bad for homeless people and the undocumented," he said.

Low-income people, and consumers who don't have a good credit score and then don't have access to a credit or debit card, are most affected by businesses that don't accept cash, agreed Susswein with Consumer Action.

"Those folks have limited or no way to do business with retailers that don't accept cash," she said.

That may be forcing those consumers to go to check cashers who charge high fees or potentially to some underground economy, Susswein said.

People of color disproportionately are underbanked, meaning they may may not have an account to tap for an electronic payment or that allows them to have a credit or debit card, said Stanley, who wrote an ACLU piece in 2019 entitled "Say No to the Cashless Future and Cashless Stores."

A consumer who doesn't have access to a bank account or a debit or credit card and goes to a retail store to load cash onto a debit card is also paying more for the ability to use the plastic card for payment because of extra fees, said Zagorsky.

Rural areas and smaller cities are also more likely to be adversely affected when cash payments aren't allowed, said Stanley.

A combination of businesses going cashless and consumers using or carrying less cash also has a potentially negative affect on service-industry workers who rely on cash tips, such as valets, wait staff and hotel housekeeping staff, Stanley said.

Cash can increase privacy

Cash also protects consumers' privacy, said Stanley. Credit card data is shared by numerous parties when consumers make a purchase, he said.

"Data floating around about your purchases in some cases, might be harmless. So you bought a loaf of bread, but in other cases, it could be very sensitive and revealing about you," he said.

Cash can also offer another form of protection, Stanley, Zagorsky and Susswein said.

For people experiencing "domestic violence or anybody else who may be oppressed, cash can be a vital lifeline," said Stanley.

What is a cash diet?How to cash stuff, think about your spending and maybe save some money

Cash is still king in an emergency

Cash will still work when there are emergencies, incidents or natural disasters, where electronic payment systems will fail, said Zagorsky.

Zagorsky, who was recently traveling in California, said he always carries extra cash in case there is an earthquake.

If an earthquake takes out electricity and digital forms of payment, "there's no Paypal, there's no debit card or a credit card."

Are we moving to a cashless or checkless society?

Zagorsky and Stanley don't think we're moving to a cashless or checkless society, "but this is a very slippery slope," said Zagorsky.

Refusing to accept checks reduces the risk of check fraud, Zagorsky said, which is a plus. Many businesses also accept automated payments via a checking account.

But, moving to a cashless society would leave out millions of Americans who lack access to credit cards and electronic payments or simply prefer to use cash.

"We're not saying we think you should pay with cash for everything,'' said Stanley. "We're saying that we should preserve the option of cash for people, even if that involves some expenses and some inefficiencies.

"I think there is a counter revolution happening."

Chris Chang, a USA TODAY video producer, contributed to this report. Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at [email protected] or follow her on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays,here.