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As Cashless Stores grows, Backlash also does

NEW YORK (AP) – Hembert Figueroa just wanted a taco.

So he was surprised to learn the dollar bills in his pocket were not good at the Dos Toros Taqueria in Manhattan, one of a small but growing number of establishments across the US where customers can only pay by card or smartphone.

Cash-free stores generate a setback among some activists and liberal-leaning policemen who say practices discriminate against people like Figueroa, who either lack bank accounts or rely on cash for many transactions.

Figueroa, an ironworker, had to stand on the side and held his taco to a sympathetic cashier helped him find another customer willing to pay for his meal with a card in exchange for money.

"I had money and I couldn't pay," he said.

The problem got some profiled attention this week when retail giant Amazon bent on pressures from activists and agreed to accept money from more than 30 cashless stores, including its Amazon Go convenience stores, which have no cashier and bookstores. Amazon refused to say when the change would happen.

There is no federal law that requires shops to accept money, so lawmakers work on the state and city level issue.

Earlier this year, Philadelphia became the first city to ban cashless stores, despite the efforts of Amazon to deprive it. New Jersey passed a ban soon after, and a similar ban works through the New York City Council. Earlier this year, only one jurisdiction required companies to accept cash: Massachusetts, which passed a law nearly 40 years ago.

"The potential community cost of a cashless economy I am thinking outweighs the potential benefits to businesses," said Ritchie Torres, a New York City councilman for the South Bronx who introduced the bill.

Politicians claim that while cashless stores and restaurants are not widespread now, the exercise can extend to more services, including some that cater to lower-income customers.

Walmart-owned Sam's Club opened its first cashier-less store in Dallas last year, with technology that allows customers to scan and pay for items with their smartphones. Kroger has installed similar technology in around 400 stores nationwide.

Stadiums in Tampa Bay, Florida and Atlanta have begun to go cashless, or almost cashless, and the Barclays Center, where Brooklyn Net's player is now also effective without money

"I wanted to stop this before it became a daily life , "said William Greenlee, a Philadelphia councilor who introduced the city bill.

Guardians of cashless bans concern technology is moving too fast for 6.5% of Americans households ̵

1; 8.4 million – who do not have a bank account, according to figures from the Federal Deposit Insurance Corporation.

Figueroa is among the much larger groups considered "underbanked", meaning they have a primary bank account, but regularly rely on alternative financial services like checkout boxes. More than 24 million US households are under-banked, according to the FDIC.

The problem affects disproportionate African American and Spanish communities. According to the FDIC, about 17% of African-American and 14% of Spanish households have no bank accounts compared to just 3% of white households.

Figueroa, an immigrant from the Dominican Republic, just opened a credit union account two years ago. It took a year to build up enough money to use their debit card regularly.

He occasionally trusts a check casher if he needs money quickly, and much of his income comes in cash from his job as a bus job. He has no credit cards and no apps on the phone and has only traded online three times.

Business owners who go without money say they follow the management of most customers who leave cash payments. Retailers are under pressure to accommodate customers with increased expectations for fast and seamless service driven by companies such as Amazon, Uber and Grubhub.

Leo Kremer, co-owner of Dos Toros, Taqueria where Figueroa tried to spend money, said the volume of cash transactions in his stores fell from about 50% ten years ago to 15% last year. It made the cost and logistics of managing money particularly heavy. Before you went without money, Dos Toros places were robbed twice.

Kremer still said that the company would adjust if it was legal to accept money.

"There is no bad thing about this problem. Everyone is trying to do the right things and making sure there are no unintended consequences," he says.

Critics say the ban on cash-free stores is an overreaction.

There is no aggregate estimate of how many stores in the United States have gone without money, but it is still rare.In New York City, the trend seems to be getting traction mostly with "fixed casual" eating places such as Dos Toros. requires a minimum purchase for non-cash payments.

"To call this a trend is slightly exaggerated. There are a handful of retailers trying this out in some situations here and there, but it's not something the average customer would expect to see at each store in the mall any time soon, says J. Craig Shearman, spokesman for the National Retail Federation in Washington.

Even among the wider US population, cash is still used in about 30 percent of all transactions, according to a 2018 Federal Reserve study. The study showed that most consumers prefer cash for transactions under $ 10.

Shake Shack left plans to open cashless locations after the first store in Manhattan triggered a customer backlash. The burger chain instead holds cashiers while installing ordering kiosks at several stores.

As a testimony of a commission in the New York City Council, Kremer claimed that businesses that "consistently serve the unbanked and sub-populated people are not going to go without money. It would not make sense to them."

But financial experts like Working with low-income individuals, warns against making assumptions about the shopping preference or the purchasing power of those who rely on money.

"I'm uncomfortable with the idea that some people aren't acting here, so it's okay to exclude them," says Justine Zinkin, CEO of Neighborhood Trust Financial Partners, a financial adviser nonprofit affiliated with the credit union of Figueroa Banks.

Like many New Yorkers, Figueroa regularly spends $ 10 to $ 15 per day at lunch, saying he would return to Dos Toros with his debit card now, knowing the cashless policy.

"It was a good taco , "he said.

Around him, trading is fast online and cash-free. Short-only Uber is the cut-out of the yellow taxis he receives once or twice a month, doing most of his shopping at corner stores and pharmacies, and has never made use of home delivery services such as chains introduced by Walgreens and CVS to keep Amazon in check.

Even services such as Citi Bike, the bike section company require a debit or credit card. Affordable and even offering a $ 5 monthly low-income New York City resident program, they charge without a debit or credit card to open an account with a credit union.

Beyond targeting cashless stores, Zinkin said major urgency in the digital age is finding ways to better include low income people in the banking system, such as convincing banks, offering accounts without fees and encouraging banks to open branches in child areas. In the Bronx, where Figueroa lives, the district has the lowest concentration of bank branches per household anywhere in the country, according to a report from the New York City Comptroller's office in 2015, while check boxes are common. Nearly one-fifth of the Bronx households have no bank accounts, and one-third are under-banked, according to the 2013 figures quoted in an Urban Institute study.

"We hope that the limelight shifts from punishing small businesses to the financial services market, Sa Zinkin." We don't want to be afraid of technology and hope the technology goes away. "

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