AUSTIN (KXAN) — Businesses in Austin could soon have a harder time saying no to cold hard cash.

On Monday, the Human Rights Commission, which consults and advises the Austin City Council on matters involving racial and ethnic discrimination, voted to recommend and bring forward to the council that they discuss and consider banning local businesses from going cashless.

Board member Garry Brown says the issue matters because many people don’t have bank accounts. He says that the City of Austin has a reputation of being inclusive and the Commission wants it to stay that way.

He cites several local businesses that don’t currently accept cash, including Honest Mary’s Restaurant, Amazon Books at the Domain, and Austin favorite Tiff’s Treats.

Honest Mary’s says its reasons for choosing being cashless is that it allows for faster checkout, simplicity, and lower overhead, saying that money spent on armored trucks and late-night accounting ultimately saves customers money.

“The majority of you already prefer cards > cash,” the website reads.

But Brown says that while Austin is a “very technology-driven city,” the more businesses that move forward with cashless models, the harder it will be to go back.

Brown says the recommendation should move forward in the next few months.

Who relies on cash?

According to the FDIC’s 2017 national survey of “unbanked households” (meaning no one in the home had a checking or savings account), in that year approximately 8.4 million U.S. households — made up of 14.1 million adults and 6.4 million children — were unbanked.

The FDIC also found that approximately 24.2 million U.S. households were “underbanked,” which means that while they have a checking or savings account, they still use “alternative financial services” like money orders, check cashing, payday loans and rent-to-own services.

The majority of unbanked Americans are made up of Black, Hispanic and younger households — who would all be impacted by having even fewer options for making purchases.

People of color and immigrants also have a harder time opening and maintaining bank accounts, as a 2018 article in the Washington Post explained.

In the article, a Hispanic woman and her husband discussed their experience having their Bank of America accounts frozen after the institution reportedly asked the longtime customers to provide their Social Security number and addresses — information the bank already had — in addition to asking if they were U.S. citizens. A Tennessee man said Bank of America demanded to know about his citizenship or his account would be frozen.

This was despite the fact that the bank only asks for basic information when customers apply for accounts. However, on its website, Bank of America explains that customers with “limited credit history,” difficulty proving identification and people with “issues with checking history” must apply in-person at a financial center.

According to the Washington Post, the application includes citizenship questions. And Bank of America is not alone. Chase, Citi and Wells Fargo all have them, too.

Proof of citizenship is not required to open a bank account in the U.S., says Stephanie Collins, a spokesperson for the Office of the Comptroller of the Currency, the federal agency that supervises branch banking.

Reasons Americans gave in the FDIC survey give for not having a bank account include not having enough money to keep in an account, account fees being too high, and having ID, credit or former bank account problems that prevent them from opening an account.

Just last week, the New York City Council voted in favor of a bill that would ban businesses from becoming cashless, becoming the third U.S. city to do it, according to the New York Times.

In March of last year, Philadelphia became the first city nationwide to enact the ban and then the entire state of New Jersey banned cashless businesses. San Francisco is the other major city to ban card-only payments.

Are there benefits of phasing out paper currency?

Impact on the environment

Paper cash is made using a blend of cotton and linen, which are renewable resources but can also cause a strain on the environment due to their farming. According to Alice Wilby, of Extinction Rebellion, a group that campaigns for government action on climate change, cotton is “very water-intensive to cultivate and process,” and uses up to 10,000 and 20,000 gallons of water to make one single pair of jeans and up to 3,000 to make a T-shirt.

This is in addition to the use of dangerous pesticides and chemicals. In a 2007 research study by the Environmental Justice Foundation, the data showed that cotton accounted for 16% of global insecticide releases — more than any other crop.

Pesticides and other chemicals are shown to contribute to both acute and chronic health problems in humans, the foundation’s research reported.

A humpback whale swims in Disko Bay on August 4 (Photo by Sean Gallup/Getty Images)

The World Health Organization reported that pesticides or chemicals sprayed on conventional cotton can affect wildlife, including weakening immune systems and increasing the risk for tumors and major reproductive complications. Pesticides also seep into the dirt and water, WHO says, which find their way into Earth’s oceans, harming marine life.

(Sidenote: there’s also an argument that debit/credit cards might actually be worse for the environment than cash.)

Other benefits

In his 2014 scholarly paper, “Costs and benefits to phasing out paper currency,” Kenneth Rogoff, of Harvard University, makes several cases for why paper currency is worse than electronic transactions.

These reasons include:

Use of electronic currency makes it more difficult for centralized banks to increase or decrease interest rates in ways that benefits them, rather than customers

Paper currency is often used in criminal activities — electronic transactions make anonymity harder

Using electronic currency reduces the possibility of overinflation

Rogoff ends by theorizing that cash may end up being phased out all on its own, saying: “Given relentless technological advance, embodied in everything from mobile banking to cryptocurrencies, we may already live in the twilight of the paper currency era anyway.”