Payment Choice Act of 2025
- Sponsor
- Rep. Rose, John W. [R-TN-6]
- Committees
- Financial Services Committee (primary)
- Last action
- Feb 7, 2025
Bottom line
The bill aims to preserve consumer choice by ensuring cash remains a universally accepted payment method at physical retail locations, with specific protections and enforcement provisions.
What it actually does
This bill, the 'Payment Choice Act of 2025,' mandates that brick-and-mortar retail businesses accepting in-person payments must accept U.S. cash currency for transactions up to $500. It prohibits charging cash customers higher prices and outlines exceptions for temporary system failures or if the business provides a fee-free cash-to-prepaid card conversion device. The bill also establishes a civil enforcement mechanism allowing aggrieved customers to seek damages and penalties.
Proponents argue
Proponents argue that the bill protects vulnerable populations, such as the unbanked, underbanked, and elderly, who rely on cash and may be excluded by cashless businesses. They contend it upholds the status of U.S. currency as legal tender and ensures equitable access to goods and services for all consumers, preventing discrimination based on payment method.
Opponents contend
Opponents might argue that mandating cash acceptance infringes on a business's right to choose its preferred payment methods, potentially increasing operational costs related to cash handling, security, and reconciliation. They may also contend that the exceptions provided are insufficient and that the enforcement mechanism could lead to frivolous lawsuits against small businesses.
The bill is concise and clearly written, making it easy to understand its core provisions within the time typically allotted for legislative review.
Section 3(a) (adding 31 U.S. Code § 5104(a))
Mandatory Cash Acceptance at Retail Businesses
This provision requires any brick-and-mortar business that sells goods or services and accepts in-person payments to accept U.S. cash currency for transactions up to $500. It also explicitly forbids these businesses from charging customers who pay with cash a higher price than those who use other payment methods.
Supporters argue
Supporters argue this provision is crucial for financial inclusion, ensuring that all citizens, regardless of their banking status or preference, can participate in the economy. It prevents a two-tiered system where cash users are penalized or excluded.
Critics contend
Critics might argue this provision imposes an undue burden on businesses, particularly small businesses, by forcing them to handle cash, which can increase security risks, transaction costs, and administrative overhead compared to digital payments.
Tradeoffs
Balances consumer choice and financial inclusion against business operational autonomy and efficiency.
Section 3(b) (adding 31 U.S. Code § 5104(b))
Exceptions to Mandatory Cash Acceptance
This section outlines specific situations where a business is not required to accept cash. These include temporary issues like a payment system failure or not having enough change. Additionally, businesses can opt out if they provide a device on-site that converts cash into a prepaid card without any fees, minimum deposits (beyond $1), personal information collection, or card usage fees, and with non-expiring funds.
Section 3(d) (adding 31 U.S. Code § 5104(d))
Right to Not Accept Large Denomination Bills
For the first five years after the bill's enactment, businesses are not required to accept $50 bills or any larger denominations. After this five-year period, the Secretary of the Treasury is mandated to issue a rule specifying which bill denominations businesses are not required to accept, but this rule must ensure that $1, $5, $10, and $20 bills are always accepted.
Section 3(e) (adding 31 U.S. Code § 5104(e))
Enforcement Mechanisms and Penalties
This section establishes a multi-step enforcement process. An aggrieved customer must first notify the business of a violation, giving them 45 days to correct or cure the issue. If the business fails to respond or resolve the issue, the customer can file a civil action. Successful plaintiffs can receive actual damages (or $250 liquidated damages if actual damages are less), civil penalties up to $500 for a first offense and $1,500 for subsequent offenses, and potentially up to $3,000 in attorney's fees. The Attorney General can intervene in cases of public importance.