Will Philadelphia’s Cashless Store Ban Stifle Payment Innovation?

In July, Philadelphia will become the first major U.S. city to institute a ban on cashless stores, raising the question of how retailers will approach next-gen payments methods if more municipalities follow suit. The ban won’t apply to transactions that take place at wholesale clubs such as Costco and BJ’s that operate through a membership model, parking garages or lots, or rental car companies.

Cashless concepts would enable both retailers and credit card providers to better track consumer spending data. However, a key argument against cashless stores is that they are discriminatory against lower-income shoppers who often pay with cash. After Philadelphia Mayor Jim Kenney signed the bill into law, his spokesman noted that 26% of city residents live below the poverty line, and many don’t have a bank account.

The National Retail Federation (NRF) opposes the new Philadelphia law and similar proposals, saying businesses should be able to decide which payment methods to accept.

Despite the law’s inclusion of a provision designed to accommodate the checkout-free Amazon Go, Amazon had threatened to scrap plans…