Tuesday, August 27, 2019
Why, you might ask, would the ACLU, a nearly 100-year-old organization renowned for its work defending the constitutional rights and liberties of individuals, take on card payments? Reasons offered by Jay Stanley, senior policy analyst for the ACLU Speech, Privacy and Technology Project, include security and privacy concerns associated with card and other electronic payment methods, as well merchant acceptance costs.
“Doing without cash may be convenient at times, but if we lose cash as an option we’re going to regret it later,” Stanley said.
There has been a small but headline-grabbing trend toward cashless stores. This, in turn, has triggered a backlash, with two cities (San Francisco and Philadelphia) and the state of New Jersey this year banning cashless stores. The New York City Council is weighing similar legislation, and cashless stores have been banned in Massachusetts since 1978. Most of these pro-cash laws make exceptions for parking garages and car rental companies (where credit cards are often required for incidentals).
The blowback over cashless stores was so intense that Amazon earlier this year was forced to rethink plans for its automated cashier-less brick-and-mortar convenience stores. As a result, the retail giant decided the outlets would accommodate cash payments
Champions of cashless stores say a big downside to using cash is the risk of loss or theft. However, Stanley, in a blog post earlier this month, said that argument fails to account for other risks, such as loss of privacy and personal security.
“The harms that can result from privacy invasions (abuses, profiling, embarrassment, financial losses, etc.) should also be included in the concept of ‘security’, properly conceived,” he wrote. “And payment networks have security risks that cash does not; ask anyone who has experienced identity theft and was forced to wrangle with a nightmare mix of credit card companies, debt collectors, credit-scoring agencies, and others.”
The ACLU policy wonk also took a swipe at interchange. “With the credit card sector dominated by an oligopoly of two to three companies, there is not enough competition to keep these ‘swipe fees’ low,” Stanley stated. “If cashless stores are allowed to become widespread, that will harm the many merchants who either discourage or flat-out refuse to accept credit cards due to these fees.”
Stanley also encouraged consumers and merchants to get on board with cash discounting. “If you visit a store or restaurant that charges a higher price for credit card purchases, understand this is a socially beneficial policy, and be supportive,” he stated. “Merchants are explicitly permitted to pass swipe fees (also known as ‘interchange fees’) along to customers, which among other things is fairer to low-income customers who don’t have credit cards and shouldn’t have to absorb the costs of those cards. If you’re a business, consider passing along those fees to increase fairness as well as customer awareness of how the current system works,” Stanley said 
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