Cashless businesses are banned in Philadelphia. How do concert and sport venues get around it?

Concert enthusiasts are well-versed in the ritual of navigating through packed crowds, enduring the wait at the bar, and readying cash for a quick beverage purchase. However, a new twist awaits them at several music venues across Philadelphia, where patrons are required to convert their cash into prepaid debit cards before making any purchases — a response to the city’s restrictions on cashless businesses.

Five years ago, Philadelphia became the first major U.S. city to pass a ban on cashless businesses, requiring most local retail operations to accept cash. This move was aimed at curbing the trend toward eliminating cash transactions, a direction considered by several businesses, including Amazon, which had plans to establish cashless stores in the city.

However, there are exceptions to the rule.

On March 6, the Fishtown music venue the Fillmore Philly became the latest venue to go cashless, causing concern for many who worry about how the policy will affect customers without bank accounts. Others rejoiced in the ease of debit cards, faster lines without waiting for change, and the sanitary benefits of not handling paper money. And according to the Pew Research Center, nearly 40% of Americans have already moved away from cash transactions.

The Fillmore joins Lincoln Financial Field, the Met Philadelphia, the Wells Fargo Center, and Camden’s Freedom Mortgage Pavilion (formerly BB&T Pavilion) as cashless venues.

But technically, they do accept cash.

Instead of paying with cash at registers, customers transfer their cash onto prepaid cards for no additional fees using a machine known as a “reverse ATM.” These cards are not only valid within the venue but can also be used elsewhere, ensuring patrons don’t lose out if they don’t exhaust the card’s balance right away.

“A business that does not want to accept cash as a form of payment must provide some sort of conversion kiosk or machine that will convert the cash to a card,” said the city’s Commission on Human Relations’ executive director, Kia Ghee. “The conversion is supposed to be free, and no costs should be added to that end user.”

Despite the intention behind free cash-to-card conversion, some concerns persist regarding the impact of cashless policies on both consumers and industry workers. According to Fillmore staff, who spoke to The Inquirer anonymously because they were not authorized to speak on the issue, transitioning to cashless payments may inadvertently detract from the concertgoing experience.

Staffers estimate that, depending on the crowd, sending someone back to convert cash onto a prepaid card can eat up as much as 30 minutes of concert-viewing time.

People interviewed say they were given two-days’ notice before the venue’s switch to a cashless system, which has introduced financial difficulties for some. Previously, staff could receive tips in cash immediately after their shift or within the week, but Fillmore employees now face a nearly two-week wait for tips to be processed and included in their regular paychecks. This delay poses significant challenges for those who depend on timely tips as their primary source of income, especially during critical times of the month.

“This has left a lot of employees that rely on the Fillmore as their main source of income going, ‘What am I going to do to pay my bills this week?’ because suddenly they have to wait two weeks for any sort of income to come through,” one bartender said about the sudden switch taking place the first week of the month, when rent and bills are due for many.

While the majority of Americans have shifted toward using credit and debit cards for their transactions, approximately 14% still rely predominantly on cash — a significant decrease from 24% seven years ago. Businesses are motivated to reduce the burdens associated with cash transactions, including the costs of storage, accounting, and secure transport. Managing paper currency can add $4 to $15 in overhead for every $100 in cash earnings, per the IHL Group’s findings.

In Philadelphia, roughly a quarter of the population is “underbanked” or “unbanked,” according to the city’s Prosperity Now Scorecard, meaning they have little to no relationship with a financial institution, making cash a main form of payment for them.

If a business doesn’t accept or adds extra steps to paying with cash, it can cause challenges and stigma for those unbanked, said Raheem Stevenson, Drexel University’s director of financial empowerment and a former bank executive in Philadelphia. A lack of relationship with financial institutions disproportionately affects Black and Hispanic Philadelphians.

“We find that being discouraged from accessing a business is not just a one-generation impact,” Stevenson said. “I think it would have a tremendous impact on a consumer just being discouraged, especially when you think about trauma-informed awareness when it comes to finances.”

But why are there consumer protections against businesses going cashless? The answer is accessibility, said Judith A. Levine, director of Temple University’s Public Policy Lab.

“Cashless businesses create inequality. For people who are unbanked or underbanked, they may not have credit cards or a smartphone capable of digital payments — they don’t have a way to pay other than cash,” said Levine. “And because middle-class and wealthy people operate a lot of their financial lives through credit, automatic payments, and having money in the bank, they often get free checking accounts or credit cards with no annual fees.”

According to the Georgetown Journal on Poverty Law & Public Policy, people with lower incomes are more likely to face maintenance fees associated with banking than their wealthier counterparts.

“They don’t get free accounts or fees waived because it can be difficult to maintain a minimum balance,” Levine said. “Doing business this way [for the unbanked population] costs money, where cash does not.”

Cashless practices also speak to privacy and surveillance issues that digital transactions create, said University of Pennsylvania postdoctoral fellow Stanley Collins, who studies the intersection of changing neighborhood demographics and trends as it relates to music venues.

“Cashless businesses lend themselves to the ‘datafication of life.’ It’s not just going to a concert, it’s an institution being able to know who is coming to shows, the types of shows they like, when they go to shows, and where they live,” said Collins. “They’re not just getting the $50 to $100 from you for the tickets, but also all these other data points they can use.”

In Philadelphia, businesses that sell retail goods and services cannot refuse to accept cash as a form of payment.

There are exceptions, such as for a car rental that requires a card on file, parking garages that use kiosks to take payment, and rideshare and food delivery apps. It also includes businesses that provide a way to convert your cash into payment of some kind, using a one-to-one dollar conversion with no additional fees, said Ghee.

By Philadelphia law, a business can refuse cash payments for:

If a business doesn’t offer cash conversion and isn’t exempt from the regulations, it can receive a fine of up to $2,000 for refusing cash payments.