In a commentary piece for Fortune, ILSR researcher Charlie Thaxton details the growing cashless retail trend, steps cities and states are taking to regulate the practice, and the ultimate effect that high credit card “interchange fees” have on small businesses and the economy at large.
“Your money’s no good here. At least, that’s true at a growing number of stores and restaurants that are ditching cash and switching entirely to credit and debit cards. Cashless retail is still relatively uncommon, but it’s on the rise and has begun to concern some lawmakers. New Jersey recently banned cashless retail. Philadelphia has done the same. Other cities may soon follow.
So far, the debates leading up to these laws have mostly centered on how cash-free establishments impact the many low-income people who lack bank accounts and credit cards. But there’s another major problem with going cashless. Cashless retail—and credit cards in general—allow a handful of giant banks and credit card monopolies to siphon more and more revenue from the productive economy, at the expense of consumers and businesses.”