Restaurants, retailers rethink cashless as financial inclusion takes center stage

The growing backlash against cashless retail and restaurants is forcing merchants across the country to rethink their business models, as local and state legislatures have forced an increasingly urgent debate on financial inclusion, innovation and the cost of doing business in a free society.

Additional legislation to regulate cashless retail is pending after New Jersey and the city of Philadelphia passed laws to require most retailers and restaurants to accept cash, and upstart businesses that have considered themselves progressive-leaning are discovering the need to find a balance between the smart use of new technology and the cultivation of a welcoming and open relationship in the communities they serve.

Late last month, Sweetgreen, a fast casual restaurant chain with 90 locations nationwide — including six in the city of Philadelphia, announced that it would start accepting cash after realizing that the cashless movement that it helped develop was potentially excluding some of its most vulnerable customers.

"A lot of people feel like it's creating sort of an us-and-them kind of split," said Philadelphia City Councilman Willliam Greenlee, who sponsored the cashless ban in that city. "When I talked to the folks at Sweetgreen, they kind of got what I was saying and said, 'Certainly we don't want to project that image that we're discriminating against anybody or excluding anybody.'"

A new establishment in downtown Detroit, Mootz Pizzeria and Bar, also has decided to change its policy and now accepts cash as a form of payment.

Lisa Walters, one of the restaurant's owners, told Mobile Payments Today that the main impetus behind the initial decision to go cashless was a concern about safety and security, as the establishment is open until 3 a.m. on weekends. The policy reversal by Mootz was unrelated to any pending regulations, though, since proposals to ban cashless commerce are not on the table in either the city of Detroit or the state of Michigan.

Walters said that the restaurant was receiving about 95% of payments via credit, debit, Google Pay and Apple Pay, but that staff had gotten some feedback from customers who wanted a cash option. "I think cash will always have to be around," she said.

Pending legislation

In New York City, council member Richie Torres is working with the office of Mayor Bill DeBlasio to make edits to a proposed bill to ban cashless retail, according to Raymond Rodriguez, deputy chief of staff for Torres.

He said the bill has garnered the support of labor unions in the city, including the Retail, Wholesale and Department Store Union. Additionally, Mulberry & Vine, a cashless restaurant, has expressed support for the bill. Rodriguez would not elaborate on whether any final decision has been made on policy, however.

The legislative debate over cashless retail has spread into markets in other parts of the country, as well. Late last month in San Francisco, the city's board of supervisors advanced a bill in committee requiring retailers and restaurants to accept cash.

Standard Cognition, a San Francisco-based technology firm that uses artificial intelligence and machine learning to power autonomous checkout for retailers, has its own AI-powered convenience store in the city. However, unlike rival Amazon Go, the Standard Cognition business model already allowed for cash buyers, according to a spokesperson.

"Cash payments have been part of our roadmap since the beginning," Michael Suswal, founder and CEO of Standard Cognition, told Mobile Payments Today in an emailed statement provided by a spokesperson. "We've talked to hundreds of retailers over the past two years and every retailer wants the option of taking cash."

Consumer flexibility

A study released last week by Origin, the independent research arm of marketing firm Hill Holiday, showed that having a cash payment option is still very important to consumers.

The report, based on a survey of 1,000 smartphone users, showed that 76% still carry cash daily and 55% "hate" the idea of life without cash. The study also showed that contactless cards and digital wallets are not always the first choice for consumers, as 45% of respondents said there is no need to use mobile payments and 63% said there should be clear and consistent visual cues around mobile payment options at the point of purchase.

"It's very interesting to see more and more companies reverting back to cash," Katherine Schilling, vice president and strategy director at Hill Holiday, told Mobile Payments Today via email. "While the convenience and speed of mobile payments are very appealing, based on our research, there are a lot of barriers still holding us back from fully embracing the cashless craze."

Original author: David Jones