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Cash Legal Tender

European legislation on cash legal tender sets out the rules for the use and acceptance of euro banknotes and coins as legal tender within the European Union. In the euro area, euro banknotes and coins must in principle always be accepted, unless another payment method has been agreed in advance or a legal exception applies. These rules ensure that everyone retains access to physical money and that cash payments remain possible, even as digital means of payment become increasingly common.

Euro banknotes and coins are officially recognized as legal tender in the euro area. This means that shops and businesses must, in principle, accept cash payments. Exceptions to this rule are only permitted in special circumstances.

Refusal is permitted when there is a valid, pre-announced, and temporary reason—for example, when a customer wants to pay with a very high denomination banknote and the store does not have change. Cash may also be taken out of circulation if it has been explicitly agreed with the customer in advance that another payment method will be used.

Unilateral exclusion by businesses—such as a sign saying “pay with debit cards only, no cash”—is not permitted under the proposed European rules and is therefore expressly restricted.

Key elements of the European Commission’s proposal

The European Commission has submitted a comprehensive legislative proposal to further clarify and strengthen the status of cash. Some of the key points are:

  • When a bank wants to close an ATM or branch, it must notify the national supervisory authority in advance.
  • Banks must take measures when the closure of an ATM or branch reduces access to cash.
  • Member States must monitor the accessibility of cash in each region – both in cities and nation wide – using European and national measurement methods.
  • If a Member State fails to take sufficient measures, the European Commission may intervene to ensure access to cash.
  • Shops and businesses may not refuse cash as a matter of course and may not use general terms and conditions to categorically exclude cash.

These proposals are part of the broader regulatory package on the euro and are in line with the increasing attention in Europe to the availability and acceptance of cash as a public good.

Role of the Dutch Payments Association

The Dutch Payments Association is closely monitoring developments surrounding the European dossier, partly because of its close connection with Dutch legislation on cash and the future national acceptance obligation.