Spain: New Law Requires Retailers to Accept Cash

The Royal Decree 24/2021 or General Law for the Protection of Consumers and Users, making it mandatory for retailers to accept cashMoney in physical form such as banknotes and coins. More, entered into force on May 28. Refusing a paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More in cash is considered a violation of the law.

The refusal of a payment in cash is considered a minor offence. Still, it can become severe under certain conditions, for instance, if a retailer takes advantage of the demand for specific products or services or repeatedly refuses cash payments and thereby causes serious, unjust, and unforeseeable social disturbances.

“With this regulation, created with the aim of ensuring the protection of vulnerable groups or consumers, the use of cash is guaranteed as a fundamental element to protect their rights”, said Bibiana Medialdea, general director of Consumption, at a recent conference on ‘Access to cash, a universal right and a barrier against financial exclusion’, organized by the Denaria Platform, an association for the defense of cash.

This legislative measure is fully supported by popular opinion, as shown by the “Survey on the need for the permanence of cash,” commissioned by Plataforma Denaria in September 2021. 90% of Spaniards defend the need for cash as a payment methodSee Payment instrument. More, more than 70% of the population considers it necessary for our society, and 77% describe it as a ‘public good’.

Despite this new legislation, Spain continues to impose a limit on cash payments exceeding €1,000 when at least one of the parties involved in the transaction is acting in a professional or business capacity. In March 2022, the European Central Bank vehemently criticised the measure in a published opinion.

“Against this background, the ECB considers the lowering of the limit on cash payments in transactions where any of the parties acts in a professional or business capacity to EUR1,000 to be disproportionate. It will have an adverse and undesired impact on the legal tenderMoney that is legally valid for the payment of debts and must be accepted for that purpose when offered. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered (“tendered”) in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt. More status of euroThe name of the European single currency adopted by the European Council at the meeting held in Madrid on 15-16 December 1995. See ECU. More banknotes. In addition, this cash payment limit significantly reduces the ability of payers to use euro banknotes and the freedom of citizens to choose how to pay.” — Opinion of the European Central Bank of March 15, 2022 on limitations to cash payments

The Denaria Platform has formulated three recommendations to ensure future access to cash.

1. Removal of all existing barriers to cash handling.
2. Mapping the areas at risk of financial exclusion, considering geographical, socio-economic and cultural factors, and ensuring access to cash and other financial services. This would include establishing a maximum distance between ATMs.
3. Declaring the cash infrastructure part of the Critical National Infrastructure.

This post is also available in: