“Sorry, no cards — we’re cash only.”

This depressing refrain sends many a millennial scuttling to the nearest ATM, where he will likely pay $2 or $3 so that the merchant can avoid a swipe fee.

The cap on debit fees brought about by the Durbin Amendment seems to have done nothing to curb cash-only businesses. (It may not actually have helped curb merchants’ fees either.) And they appear to particularly flourish in fintech hotspots, such as New York and San Francisco. This means more trips to the ATM — and an opportunity for startups such as Piddly.

In a manner somewhat reminiscent of fellow startup Spare, San Francisco-based Piddly, which has yet to formally launch, will empower users to avoid costly ATM fees by turning merchants into cash dispensers.

Here’s the story behind the company. A few years ago, Piddly CEO Darryl Callender had an overdue library book to return and needed to take out another book. The library, as might be expected, only accepted cash, and Callender, not wanting to pay a $3 ATM fee for a $1 overdue charge, went in search of a store offering cash back on purchases. He wound up at a health food store and paid too much for an organic yogurt, and, even then, the store only offered cash back in $10 or $20 increments. So he got the $10 (and the yogurt, which was cucumber-flavored) and hiked back to the library to pay the piddling fee and get out a new book.

Ideally, the library would take mobile payments, but since that will never happen, Callender built Piddly, which has users display a code to participating merchant POS systems to get $5, $10 or $20 cash via ACH, avoiding card fees. Piddly charges users $0.50 per transaction. The system is built around small transactions and targets millennials, who rely on debit cards and often do not carry cash because of the hassle and fees associated with getting it.

The consumer use case of avoiding ATM fees is clear enough, but Callender asserts the service is also a win for banks and merchants. Piddly can save banks as much as $6.75 on a single transaction by eliminating the need to reimburse ATM fees or pay interchange to out-of-network ATMs, Callender told Bank Innovation. Banks also lose out on swipe fees on future debit transactions when customers spend cash. For merchants, Piddly avoids the small-dollar purchases with cash back that consumers employ to avoid ATM fees and which cost merchants in processing fees.

The cashless society is still not with us, nor is it likely to be soon. Half of all transactions in the U.S. under $20 are cash-based, according to a recent report from the Federal Reserve Bank of San Francisco. Diebold Executive Vice President and Chief Innovation Officer Frank Natoli told Bank Innovation last Monday that his company saw cash use on the rise, growing 6% annually even as its share of total payment transactions declines.

“As we continue to move forward in payments, cash is still a huge piece of the puzzle,” Natoli said. “We’re seeing huge growth in alternative payments, but cash is at least holding its own.”

Callender, for his part, believes mobile payments will inevitably win out, but that, like anything, they need to start small.

“People may be reluctant to send $500 through mobile payments for fear the money will just disappear,” he said. “But with $5 they say, ‘Ok, I’m fine with that.'”

Piddly, he emphasized, is about bridging the worlds of cash payments and mobile payments via small transactions. The target market of millennials is used to small debit card transactions and is highly sensitive to fees, Callender said, because, well, they’re often broke.

“When you’re broke,” Callender said, “a $3.50 ATM fee can be a serious thing.”

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