Cashless Stores and Cash Users

30 Pages Posted: 21 May 2019 Last revised: 23 Oct 2019

See all articles by Oz Shy

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Multiple version iconThere are 2 versions of this paper

Date Written: October 21, 2019


The emergence of cashless stores has led several cities and states to ban such stores. This article investigates this policy issue by characterizing consumers who pay cash for in-person purchases and banked and unbanked consumers who do not have credit or debit cards. Using a random utility model, I estimate 9 to 41 average percentage drop in consumer surplus if all stores were to become cashless and when utility is measured by the cost of making a payment, security, and convenience. The conclusion provides discussions of alternatives to cash that may be needed before all brick-and-mortar stores become cashless.

Keywords: Cashless stores, banning cashless stores, consumer payment choice, in-person purchases, alternatives to cash, random utility analysis

JEL Classification: D9, E42

Suggested Citation

Shy, Oz, Cashless Stores and Cash Users (October 21, 2019). Available at SSRN: or

Oz Shy (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

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