When Paying in Cash Costs Extra: America's Reverse ATMs Convert Money into Debit Cards

At a New York Yankees baseball game, one fan discovered its concession stand doesn't accept cash. "An employee directed him to a kiosk that could convert his greenbacks into plastic," reports the Wall Street Journal, where the fan, "fed $200 into the reverse ATM, which subtracted a $3.50 fee and spat out a debit card with a balance of $196.50."Paying with cash used to be a way to get a discount. These days it can often cost an extra $1 to $6 - the sort of transaction fees once limited to swiping a credit card or using an out-of-network ATM. Reverse ATMs like those at Yankee Stadium are now common at cashless venues and restaurants across the country as a way to cater to those who prefer paying in cash. People who want to pay their parking tickets, tolls, taxes or phone bills in cash, meanwhile, often learn that government agencies and businesses have outsourced that option to companies that usually charge a fee. All that can amount to a penalty on the people who prefer paying cash. Though it is more common to buy things with cards and mobile devices, cash remains the third-most popular way to pay, accounting for 16% of all payments in 2023, according to the Federal Reserve. That's down 2 percentage points from the year before, continuing a steady decline that accelerated during the pandemic."It's unbelievable that we actually have to tell retailers, 'This is U.S. currency and it's something that should be accepted,' " said Jonathan Alexander, executive director of the Consumer Choice in Payment Coalition, a group of businesses and nonprofits lobbying for the continued acceptance of cash. There aren't federal laws that require businesses to accept cash. States like Colorado and Rhode Island and cities like New York banned cashless retail establishments after many stores shifted to card-only transactions to reduce the spread of Covid-19, speed up transactions and cut back on theft. In 2023, lawmakers in the House of Representatives and the Senate introduced bills requiring that businesses accept cash for all in-person purchases under $500, unless they provide devices like a reverse ATM that don't charge fees. The bills haven't passed. Cashless businesses can be a burden for older or lower-income shoppers who are less likely to have access to digital payments. They also pose challenges for younger people who haven't yet set up credit cards or bank accounts. The article includes the story of an 18-year-old who earned cash by babysitting, then went to a hockey game and "was charged a 50-cent fee after putting $20 into a reverse ATM...to order chicken nuggets and a bottle of water." (Others who prefer cash "say paper money is anonymous, helps them keep spending under control and is better for tips," the article adds noting that roughly six in 10 Americans use cash for at least some of their purchases, according to Pew Research Center.) The makers of one "reverse ATM" tell the Journal that whether or not someone gets charged a fee actually depends on what state they're in - and on the preferences of the venue that installed the ATM machine.

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