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The Impacts of Cashless Businesses on Retailers, Consumers, and Cash Use





A number of businesses in the United States are seeing the benefits of refusing to accept cash payments. However, downsides to a cashless economy abound, particularly for consumers, many of whom continue to prefer paying in the traditional way. This broad but enlightening paper from Federal Reserve policy expert Claire Wang examines the pros and cons to both businesses and individuals of going cashless. Her findings will intrigue economists, executives and consumers. 


Businesses find they can better control their operating costs by not accepting physical money.

A recent trend among vendors – notably among airlines, restaurants, sports venues and general retailers – is to refuse payments made with notes and coins, particularly in larger US cities such as New York, Los Angeles, Chicago and Houston. 

Three reasons underlie this shift: First, cashless businesses can save billions of dollars on the costs of handling currency. Second, eschewing paper money lowers opportunities for theft. And third, cashless transactions are faster and...

About the Author

Claire Wang is a policy analyst for the Federal Reserve System’s Cash Product Office.

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