New York mandates cash acceptance

A new law takes effect in New York on Saturday requiring stores in the state to accept cash payments. New York Attorney General Letitia James issued a consumer alert on March 23, 2026, reminding New Yorkers that under a law passed last year it is illegal for a food store or retail establishment in the state to refuse payment in cash for goods or services.

The law, passed by the state legislature in June 2025, mirrors a New York City law that went into effect in 2020 in the early days of the COVID pandemic, when consumers and businesses sought to limit touching cash due to fears that it might carry the virus. It didn't limit cash use. Nonetheless, electronic payments, especially digital wallets, have been gaining wide acceptance since the pandemic, both for ecommerce and in-store purchases.

According to research by Worldpay, 57 percent of U.S. adults were using digital wallets in 2024. Juniper Research pegged the total number of digital wallet users worldwide at 4.5 billion last year. The total is due to hit 6 billion by 2030.

Still, cash acceptance is seen as a necessity for lower income consumers, the so-called unbanked, who may not have bank accounts or credit cards. The Federal Deposit Insurance Corp. reported that in 2023, the most recent year for which data is available, 4.2 percent of U.S. households, or about 5.6 million households, were unbanked.

Bipartisan legislation currently before Congress, the Payment Choice Act—first introduced in 2023—would make a New York-style ban nationwide.

Hefty fines for violators

Under the new New York law, food stores and other retail establishments cannot require consumers to pay by credit card or other cashless transaction methods, and they cannot charge cash-paying customers higher prices for using cash. Violators face maximum civil penalties of $1,000 for the first violation and $1,500 for each subsequent violation.

"New Yorkers have a right to service no matter how they choose to pay," Attorney General James stated. "Businesses cannot deny New Yorkers access to necessities like food and clothing by refusing to take cash or charging shoppers more for paying in cash. I will not hesitate to enforce this law to protect consumers across our state."

The new law does have a few exceptions:

• Stores do not have to accept bills in denominations above $20;

• Stores do not have to accept cash for any order made by telephone, mail or internet, unless the transaction takes place at the store;

• The law does not apply if a store provides a device on its premises that can be used to convert cash into a prepaid card, although there can be no fees associated with the conversion, nor can there be any requirement that the card be loaded with a minimum amount above $1.

For payments providers and merchants, the law underscores a growing tension between innovation and access. While digital payments continue to expand, policymakers are signaling that cash remains a critical part of the ecosystem—at least for now.

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