THE SENATE

S.R. NO.

183

THIRTY-FIRST LEGISLATURE, 2021

 

STATE OF HAWAII

 

 

 

 

 

SENATE RESOLUTION

 

 

REQUESTing THE DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM TO CONDUCT A STUDY TO EXAMINE THE USE AND EFFECTS OF TRANSACTION MEDIUM EQUITY, WHICH INCLUDES ELECTRONIC TRANSACTIONS AND CASH TRANSACTIONS, ON CONSUMERS AND BUSINESSES IN THE STATE OF hAWAII.

 

 


     WHEREAS, as the world faces rapid changes to technology, consumers and businesses alike have increasingly turned toward a cashless environment where electronic transactions involving credit cards or other digital transactions are used instead of cash; and

 

     WHEREAS, cash transactions are advantageous and convenient in some respects for consumers as most businesses accept cash payments, and consumers do not have to worry about or keep track of repaying a credit card bill; and

 

     WHEREAS, consumers using cash transactions are limited to in-person transactions and cash transactions are more readily subject to theft as cash is easier to steal and there is little protection for consumers; and

 

     WHEREAS, for consumers, credit cards or other electronic transactions can also be advantageous because they are able to make transactions both in-person and remotely, earn reward points in the form of cash back payments, receive protection in the case of fraud or theft, and are an efficient form of payment; and

 

     WHEREAS, consumers also face disadvantages in using credit cards or other electronic transactions because it is difficult to monitor or manage credit card spending and credit card companies impose fees, interest rates, and other terms that may be confusing or misleading resulting in missed payments or excess interest; and

 

     WHEREAS, on the other hand, for businesses, cash transactions guarantee payment for immediate deposit or spending; and

 

     WHEREAS, because more consumers are using credit cards or electronic transactions, including digital payments, such as ApplePay, GooglePay, AliPay, etc., cash-only businesses are losing billions of dollars in revenue merely because they do not accept other forms of payment; and

 

     WHEREAS, the acceptance of credit card payments or other electronic transactions help businesses maximize their profits because an increasing number of high-income consumers favor using credit cards or other electronic transactions when shopping; and

 

     WHEREAS, many credit card companies impose a transaction fee or processing fee that is normally paid by the retailer, but it is becoming more common for retailers to transfer the cost of the processing fee to consumers in the form of a surcharge; and

 

     WHEREAS, while processing fee surcharges are relatively insignificant to consumers when making large purchases, the processing fee surcharges are more evident for small purchases as they can quickly add up over time; and

 

     WHEREAS, for some small business owners it is not advantageous to accept credit cards or other electronic payments because the processing fees negatively impact their profit margins making cash-only transactions more convenient and cost effective; and

 

     WHEREAS, it is important to gather information on the use of electronic and cash transactions in Hawaii to determine their transaction medium equity and how they can benefit both consumers and businesses; now, therefore,

 

     BE IT RESOLVED by the Senate of the Thirty-first Legislature of the State of Hawaii, Regular Session of 2021, that this body requests the Department of Business, Economic Development, and Tourism to conduct a study to gather information on the use of electronic transactions and cash transactions in the State to determine how these transactions benefit consumers and businesses and to help guide future legislation, policy recommendations, and decision-making; and

 

     BE IT FURTHER RESOLVED that the Department of Business, Economic Development, and Tourism address the following issues:

 

     (1)  Determine whether electronic transactions (including credit cards and digital transactions) or cash transactions are more prevalent in Hawaii;

 

     (2)  Determine who benefits from or is harmed or disadvantaged by electronic transactions;

 

     (3)  Determine who benefits from or is harmed or disadvantaged by cash transactions;

 

     (4)  Identify how the information gathered can be used to benefit both consumers and businesses;

 

     (5)  Identify how certain transactions can be balanced or incentivized so that both consumers and businesses benefit from electronic or cash transactions; and

 

     (6)  Suggest recommendations for future legislation that benefits both consumers and businesses; and

 

     BE IT FURTHER RESOLVED that the Department of Business, Economic Development, and Tourism is requested to submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2022; and

 

     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Director of Business, Economic Development, and Tourism.

 

 

 

 

OFFERED BY:

_____________________________

 

 

Report Title:

Department of Business, Economic Development, and Tourism; Transaction Medium Equity; Electronic Transactions; Cash Transactions