Financial Wellness
Paying With Cash Can Now Cost Extra
The next time you try to pay with cash, don't be surprised if it costs you extra. In some places, people paying with physical dollars and cents now must fork over a small fee for the privilege.
The Wall Street Journal reports1 that businesses no longer accepting cash may direct you to a "reverse ATM." These companies require feeding dollar bills into the machine, which issues a plastic debit card usable with them or other retailers, often with a fee.
The Journal reported Noa Khamallah's experience at Yankee Stadium in New York City, where he fed $200 in cash into the machine to try and pay for food and drinks, only to receive a debit card worth just $196.50 after a $3.50 fee was automatically deducted.
Reverse ATMs are becoming more popular at establishments that no longer accept cash payments, the WSJ reports. Additionally, some government agencies have outsourced payments to companies that might charge a fee for cash transactions. Consequently, paying cash for everything from taxes and tolls to parking tickets could generate a small fee.
Reverse ATMs are already well-established in Europe and Asia, and their popularity is spreading in the U.S., as reported by Unicorn Group, a payment service provider. According to Unicorn Group:
"Reverse ATMs are one more step towards a future of digital payments that will largely leave cash in the past."
Being charged a fee for the privilege of paying with cash is a reversal for people accustomed to earning a discount for paying with cash. Retailers, gas stations, and others have traditionally favored cash payments to avoid credit card processing fees.
If you use a reverse ATM, Unicorn Group cautions against another potential drawback: Some cards may incur a "dormancy fee," reducing the balance after three months of inactivity.
So, the next time you head to the ballpark or any other venue, you might want to bring your credit card or debit card, just in case.
