New Jersey legislators last week passed a bill forcing retailers to accept paper money, a move that takes aim at the growing number of restaurants and shops that are going cashless. By far the most prominent name in that space is Amazon, whose Go convenience stores are not only cashless; they’re cashier-less, with surveillance technology and an app allowing customers to bypass the checkout.
If New Jersey Governor Phil Murphy signs bill A591 into law, retailers in the state will have to offer customers the option to pay in cash. Philadelphia’s city council is due to vote on a similar bill next week, and the state of Massachusetts has long had a policy against cash-free businesses. As Fortune reported in 2016, a 40-year-old Massachusetts law says retailers cannot “discriminate against a cash buyer by requiring the use of credit.”
The argument behind the New Jersey bill is that cashless stores marginalize customers who do not have access to credit. “Any effort by retail establishments to ban the use of cash would be discriminatory towards those people,” argues New Jersey lawmaker Paul D. Moriarty, a sponsor of the bill. Moriarty is also sponsoring a bill that would prevent landlords from requiring tenants to pay via electronic funds transfer.
Another case against the cashless movement was put forward by financial advisor Milo M. Benningfield in a commentary for Fortune; he argues that “frictionless” transactions could lead to irresponsible spending.
Amazon and Walmart expressed concerns about the New Jersey bill last summer, after which lawmakers shelved a vote on it, according to the The Philadelphia Inquirer. Amazon has at least one cashless bookstore at a mall in Paramus, N.J.
Proponents of the cashless movement argue that it reduces the risk of theft and violence that paper money can present. Last year, Union Square Hospitality Group CEO Danny Meyer wrote that four restaurants in his group were going cashless for safety and efficiency reasons, despite the possible effects on people without bank accounts or credit cards: “As an organization devoted first and foremost to our employees, we determined that the benefits for our team—particularly their safety—outweighed the unintended side-effects for a small segment of our guests.”
Businesses adopting cashless models, it should be said, are responding to consumer behavior in the crucial 25-to-44 age group; the cohort uses cash just 25% of the time, according to the latest Federal Reserve Bank report. Overall, 30% of payments in the U.S. are still cash, and despite inroads by e-commerce, some 77% of all payments are made in person. Still, the youngest Americans are likelier than any other group to use mobile payments services, which may hint at the future of the cashless movement.