Dollar bills and coins for tip or gratuity
Photograph ©2016 by Brian Cohen.
Brian Cohen·
Financial
··17 Comments·4 min read

Why Governments are Hypocritical in Forcing Businesses to Accept Cash

When was the last time you used cash to pay for anything?

With the advent of credit cards — as well as a plethora of electronic payment services and alternative currencies; and compounded with the gradual elimination of pennies and other smaller denominations of currency — cash is becoming less relevant every day; and businesses are embracing this brave new era of cashless payments…

Why Governments are Hypocritical in Forcing Businesses to Accept Cash

…but some businesses no longer accept physical cash at all as a payment — and William K. Greenlee decided to do something about that, as he objected to that business practice.

The city of Philadelphia passed a law which requires all businesses to accept cash — that is, physical dollar bills or coins — effective as of Tuesday, October 1, 2019.

“As business models evolve we must ensure that it’s not discriminatory” is what Greenlee — who is a member of the city council of Philadelphia — posted in this message on his official Twitter account. “Nearly 10% of Philly residents do not have credit I am happy to say @PHLCouncil just passed my legislation requiring businesses to accept cash as payment.”

 

“Overall, the percentage of cash payments in the U.S. has been dropping, from 33% to 26% in just the past four years”, according to the summary of this video titled The Backlash Against Going Cashless from CBS This Morning. “That’s prompted some businesses to go entirely cashless. But not everyone is buying in.”

The bill was signed into law by Jim Kenney — who is the current mayor of Philadelphia — back in February of 2019; but implementation of the law was delayed until October.

“The cashless ban was introduced as a way to help protect lower-income residents who might not have electronic banking services available to them,” according to this article from WPVI-TV Channel 6 Action News in Philadelphia. “Some transactions excluded from the law include those made by telephone, mail or online and payments at parking lots and garages.”

What About Electronic Tolls

Meanwhile, this official press release from the Pennsylvania Turnpike Commission announced that it plans a full transition to all-electronic tolling in late 2021.

All-electronic tolling means that no physical dollar bills or coins will be accepted at any of the locations which collect tolls. Ironically, part of the 552 miles of the Pennsylvania Turnpike serves the greater Philadelphia metropolitan area.

“We recognize that customers pay a premium to travel the Turnpike, and for that reason we are continually reviewing the safety and efficiency of our system,” explained Mark Compton, who is the chief executive officer of the Pennsylvania Turnpike Commission. “Nine years ago, we undertook an AET feasibility study at a time when E-ZPass users were at around 60 percent. Today, our studies and pilot conversions have been completed and now more than 80 percent of our travelers prefer E-ZPass.”

Greater than 30 agencies in 14 states have established systems using technologies which employ all-electronic tolling.

“Cashless tolling has been adopted by dozens of agencies across the United States because of the improved safety and mobility it provides,” Compton explained. “Everybody pays electronically, so there’s no need to stop; everyone benefits from the convenience of uninterrupted travel. Plus, cash and E-ZPass customers no longer need to dart across tollbooth traffic to reach their lanes.”

Try convincing people who believe that all-electronic tolling in South Africa is “economic apartheid” that everybody pays electronically. “I think our government has squandered another opportunity of showing itself to be a caring state by running roughshod over public resistance to e-tolls”, according to Zwelinzima Vavi, who is the former general secretary of the Congress of South African Trade Unions. “We must resist the e-tolls with everything we’ve got. We must do it for the sake of generations after us. Don’t buy e-tags! Continue using the highways! Down with economic apartheid!”

See also

Judge for yourself as to whether or not the term “economic apartheid” is too harsh by watching this video.

Summary

The concept of not slowing down to pay a toll may be appealing; but I have been opposed to all-electronic tolling for a number of reasons.

As one of many examples, if someone from the state of Mississippi — which is one of 22 states which has no toll roads — must use a highway or a bridge which only charges electronic tolls and cannot be reasonably avoided, that person must not only pay for the full cost of the toll; but also in addition pay an administrative fee…

…and if the vehicle used is rented from a car rental agency, the driver is subject to surcharges imposed by the rental car company.

For one government to decide that businesses not accepting cash is considered potentially discriminatory — enough to pass a law to that effect — while another governing body encourages all-electronic tolling along highways is hypocritical, in my opinion, as I do not see how one scenario is different from the other.

I believe that motorists — who are just as much consumers who drive on the highway as customers of businesses are consumers as well — should have more of a choice on how they prefer to pay their tolls so that everyone wins. In my opinion, every toll collection point should have at least one toll booth with which physical coins and dollar bills are accepted for payment — and perhaps even a second toll booth through which exact change is required with no attendant to man it.

Articles at The Gate pertaining to the topic of electronic tolls include:

Photograph ©2016 by Brian Cohen.

Related

17 Comments

  1. There’s nothing to stop a resident of Mississippi from applying for an EZPass from another state.

    Also, instead of forcing cash on businesses, they should be outlawing fees on credit card payments like some countries have done.

    Reply

    1. The problem is that a person who would rarely use EZPass from another state cannot just apply for it, Barry Graham.

      If a person has to fund the EZPass account with a minimum amount of money plus pay fees, that does not resolve the issue any better, in my opinion…

      …and from which state should the person apply for EZPass? Now research is involved, as it depends on where the person plans to travel.

      Correct me if I am wrong, please.

      Reply

      1. Brian, New York has a new pay per trip plan linked to a checking account that doesn’t require a pre-payment. When I left New York, I kept my NY EZPass open. There is no requirement to live in a state to get an EZPass. I think this would work.

        Reply

        1. I don’t think I imparted my thoughts clearly enough, Barry Graham.

          I know that there is no requirement to live in a state to get an EZPass. What I was referring to is that each state has its own prices and fees for EZPass, and no state has a one-size-fits-all solution, which requires some research as to from which state is the best for the needs of the person purchasing it. Some states have a lower minimum amount to fund the EZPass account, but with higher monthly fees; while other states require a higher minimum amount to fund the EZPass account, but with lower monthly fees.

          The whole research process can be confusing to someone who is not used to using EZPass or some other automated electronic tolling system.

          As for New York, I did not know about the pay-per-trip plan. I will have to look into that…

          Reply

  2. Isn’t hypocrisy one entity or person saying one thing and doing another? I’d see your point if the state of Pennsylvania prevented businesses from going cashless while enforcing cashless tolls, or if Philadelphia endorsed cashless tolls, but neither of those things have happened, at least not yet as far as I can tell from your article. Two entirely separate – albeit geographically close – governments approaching an issue differently is something that probably has to be addressed, but that’s federalism, not hypocrisy. Likewise, it’s not hypocrisy if one state raises revenue at the same time a neighboring state is cutting revenue because different governments are allowed to – and probably should – approach issues differently, if only to provide some evidence of which way is better. Laboratories of democracy and so on and so forth. I’m all for debating right vs wrong on these things, but claiming hypocrisy is intellectually dishonest.

    Reply

    1. Your argument is well thought, Rob; but although “it’s not hypocrisy if one state raises revenue at the same time a neighboring state is cutting revenue because different governments are allowed to – and probably should – approach issues differently, if only to provide some evidence of which way is better”, those are not governments with overlapping jurisdictions and not really applicable pertaining to this article, in my opinion.

      Reply

      1. That’s *precisely* the point. Two different entities having two different positions is not hypocritical if they’re side by side, nor is it hypocrisy if they’re overlapping jurisdictions. Is it odd(ish), noteworthy, potentially awkward? I guess, though cities and their surrounding states have good-faith disagreements on policy *all* the time (see: smoking bans, tax policy, cooperation with federal agents, investment in social services, crime prevention, education standards and on and on and on). I take exception only with the word hypocrisy because it implies bad-faith words or actions (or both!) that are entirely absent from the argument and the news cited in the article.

        Reply

  4. I welcome the cashless bans.

    Cashless businesses further marginalize the already economically marginalized, make politically-vulnerable people even more vulnerable than they already are to government surveillance and shutdowns — even remotely — than is already the case. And it’s not beyond the realm of possibility that electronic payment systems crash or are disabled by nefarious actors, be they state actors, acting on behalf of state actors or are not.

    The ability to use cash must be preserved for many reasons, but sadly I expect cash use to become further marginalized with governments, businesses and other actors using any and every excuse to try to further stigmatize and marginalize cash use until cash is disappeared.

    Reply

  5. One state should be designated as the state for dumb people. We should send all dumb people to that state where they are provided with extra care but the government. In all the remaining states governments should pursue policies that make life efficient, sustainable, forward looking etc..

    Reply

  6. debit,

    Is it dumb to require that there be the ability of the public to use cash for local transactions? Or is it dumb to not disallow cash use for local transactions? While the idea of experimenting and allowing for comparisons may sound great in some ways, there are real human costs to playing games with the ability of people to continue or not continue to do as they have been doing for a long time.

    Reply

  7. Cashless works well for me, and probably close to 100 percent of your readers. In the US, I do think there are still some people who would struggle with that. As readers who jet around the world, it may be hard to remember how many people live close to the edge financially and how things that may be simple for us, are not for some others.

    Reply

    1. Generally cashless here but I always have some cash on me for certain situations. Tipping for instance. If you put the tip on your credit card the employee pays taxes on the full amount whereas cash tips they need only declare a certain percentage. I prefer to reward great service with cash tip, allowing the server to keep more of their well earned money. Poor or indifferent service is “rewarded” with a credit card tip they have to declare the full amount on.

      Reply

      1. I think that tips are income and taxed equally regardless of whether they are visible (on credit cards) or invisible (cash).

        Reply

  8. Credit card companies are evil thugs that practice extortion. All those generous cash back rewards are NOT paid for by them. They force small businesses to pay them. Good thing there aren’t 25% cash back. Credit card companies require small businesses to accept all credit cards (or refuse all) . They then add swipe fees, settlement fees, and all kinds of fees.

    Toll roads should accept cash. At the very least, they should have an online system where you can pay within 24 hours of using the toll road or toll bridge. That would be good for people renting cars who otherwise have to pay insane fees.

    Reply

    1. What an idiot. Credit card companies offer people unsecured credit they can use for their lives whether it is buying Christmas presents for their kids or paying for food at the supermarket. No one is forcing people to use credit cards and all terms are upfront and very clear. Credit card companies charge businesses swipe fees because it costs money to accept credit cards. Businesses likewise have to pay for a cash management account with the bank, pay insurance for keeping a store full of cash and having a manager deposit it in a safe or bank everyday. A lot of theft from employees occurs when they are handling cash. So paying 2.5% for accepting credit cards is a fair and voluntary choice for businesses.

      Reply

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