The European Commission wants almost all businesses and institutions to be required to accept cash payments. ‘Pin-only’ shops would disappear as a result.
The Commission’s proposal essentially mandates that cash, with a few exceptions, must be accepted. This obligation would not apply to online purchases, however.
There are only two exceptions to this rule. Cash may be ‘in good faith’ refused if there is a valid and temporary reason, such as a shortage of change or when a small amount is paid in very large denominations.
Also, if it has been agreed in advance that a payment will be made via debit card or bank transfer, cash can be refused. “Unilaterally refusing cash, as is sometimes done now, for example with a ‘pin-only’ sticker, is not allowed,” states the government in its initial analysis of the Brussels proposal.
According to the Commission, the new rules are necessary because while the euro is the legal tender in all eurozone countries, nowhere is it formally defined what that actually means. If it’s up to the Commission, ‘legal tender’ will mean that it must be accepted as mandatory, at its full value, allowing the payer to fulfill their obligation.
This also means that retailers cannot charge additional fees when customers want to pay with cash.
The proposed law also dictates that member states must establish rules for punitive measures if shops, service providers, or institutions do not comply with the obligation to accept cash. Penalties should be imposed, and an authority must be designated for enforcement.
The outgoing Dutch government does not have an entirely positive view of the Commission’s proposal, mainly because, in its view, it is too vague in many respects. The government notes that it is unclear whether the rules would also apply to payments to governments, such as fines or tax debts. According to the government, the obligation should not apply to such payments.
“The government primarily sees the added value of mandatory acceptance of cash at the counter and will work towards ensuring that the regulation encompasses that scope.”
Furthermore, there are questions regarding the exceptional circumstances. For instance, the Dutch government believes that there should be permanent exceptions, such as when safety is at stake. “The government can imagine that some entrepreneurs do not accept cash at all due to real and concrete security risks.” As an example, payments on buses are mentioned.
Additionally, The Hague is not keen on establishing a regulator to oversee and impose fines. According to the government, if citizens believe they have been treated unfairly, they should simply take their grievances to court.
Lesley Woutersen, one of the co-founders of the EconomicInform gives away all of his free time to the project. He is interested in stock exchange and digital assets. Lesley can be reached by email@example.com.