Opinion of the European Central Bank of 21 March 2017 on limiting the obligation to receive cash payments (CON/2017/8)
Date: 2017-03-21
Institutions: European Central Bank
Subjects: Denmark, money, national law, payment

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 March 2017  

on limiting the obligation to receive cash payments 

(CON/2017/8) 

Introduction and legal basis 

On 10  February 2017, the European  Central Bank (ECB) received  a request  from the  Danish Financial 

Supervisory Authority for an opinion on a draft law on payments (hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and the second indent of Article 2(1) of Council Decision 98/415/EC of 

29  June  1998  on  the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft 
legislative  provisions1,  as  the  draft  law  relates,  inter  alia,  to  means  of  payment.  In  accordance  with  the 

first  sentence  of  Article  17.5  of  the  Rules  of  Procedure  of  the  European  Central  Bank,  the  Governing 

Council has adopted this opinion. 

1.  

Description of the proposed limitation 

1.1  The main purpose of the draft law is to implement into Danish law Directive (EU) 2015/2366 of the 
European Parliament and of the Council2. However, in addition to this, the draft law also proposes 

certain  other  amendments  to  current  Danish  legislation,  including  one  that  is  of  relevance  to  this 

opinion since it establishes a new limitation to the current Danish legislation that obliges payees to 
accept cash payments3. 

1.2  The  legal  tender  status  of  Danish  krone  banknotes4  and  coins5  is  generally  interpreted  under 

Danish  law  to  mean  that  Danish  krone  banknotes  and  coins  are  legal  tender  unless  otherwise 
agreed, or unless other statutory provisions apply6. Under the currently applicable Act on Payment 
Services and Electronic Money7, a payee is obliged to accept cash payment if the payee accepts 

payment  by  other  payment  instruments,  such  as  payment  cards.  The  obligation  to  accept  cash 

payment in these circumstances is mandatory and prevails over a payee’s contractual freedom to 

make an agreement conditional on payment being made by a  payment instrument rather than by 

1  
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6  

7  

OJ L 189, 3.7.1998, p. 42. 

Directive (EU) 2015/2366 of European Parliament and of the Council of 25 November 2015 on payment services in 
the  internal  market,  amending  Directives  2002/65/EC,  2009/110/EC  and  2013/36/EU  and  Regulation  (EU)  No 
1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, p. 35). 

See Section 81 of the draft law. 

See Section 8(2) of Act no. 116 of 7 April 1936, as amended. 

See Section 4(1) of Act no. 817 of 21 December 1988, as amended 

See pages 29 and 33 of the Danish Payments Council, Report on the Role of Cash in Society, August 2016 and the 
explanatory notes to Section 81(3) of the draft law. 

See Section 56 of Consolidation Act no. 613 of 24 April 2015, as amended. 

 
 
 
 
                                                 
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cash.  A  payee  is  therefore  not  currently  able  to  avoid  the  obligation  to  accept  cash  by  placing  a 

clearly visible sign stating that cash is not accepted, as that would be a breach of the obligation to 

accept  cash  in  these  circumstances.  This  obligation  to  accept  cash  under  the  Act  on  Payment 

Services and Electronic Money is not based on the legal tender status of Danish krone banknotes 

and  coins,  which  is  regulated  by  the  Danmarks  Nationalbank  Act  and  the  Coinage  Act,  but  is 

considered a separate statutory obligation for payees covered by the Act on Payment Services and 

Electronic Money. 

1.3  The statutory obligation to accept cash payment, which is currently set out in the Act on Payment 

Services  and  Electronic  Money,  is  repeated  in  the  draft  law.  However,  the  draft  law  introduces  a 

new  exemption from  the  obligation to  accept cash payment by  providing  that this obligation does 

not  apply  from  10  p.m.  to  6  a.m.  Therefore,  during  these  hours,  payees  who  accept  payment  by 

payment instruments will have the contractual freedom to choose whether they want to accept cash 

payments or not. 

1.4  As is also currently the case, the obligation to accept cash payment pursuant to the draft law does 

not  apply  to  remote  sales,  in  unstaffed  self-service  environments  or  where  cash  payment  is 

prohibited  pursuant  to  the  Act  on  Measures  to  Prevent  Money  Laundering  of  Proceeds  and 
Financing  of  Terrorism8.  The  draft  law  also  authorises  the  Minister  for  Industry,  Business  and 

Financial Affairs to adopt further rules setting out specific payees or types of payees who will not be 

covered  by  the  exemption  applicable  between  the  hours  of  10  p.m.  and  6  a.m.  According  to  the 
explanatory notes to the draft law9, the aim of authorising the Minister to adopt such further rules is 

to  ensure  that  payees  that  perform  duties  that  are  vital  to  the  society,  e.g.  emergency  treatment 

services  and  twenty-four  hour  pharmacies,  must  continue  to  have  to  accept  cash  payment  at  all 

times.   

1.5  The  explanatory  notes  to  the  draft  law  state  that  the  proposal  is  intended  to  strike  a  balance 

between trying to deter robberies, for which the risk is considered higher after dark, and  trying to 

ensure  that  a  broad  right  to  pay  by  cash  will  remain  in  place.  Although  it  is  not  stated  as  an 

objective of the limitation to the obligation to receive cash payments, the explanatory notes to the 

draft law state that it is expected that businesses' cash handling costs will be reduced because of 
the limitation10. 

2.   General observations 

2.1  The ECB notes that Denmark has an exemption from participating in the third stage of economic 
and  monetary  union11.  Against  this  specific  institutional  backdrop,  the  ECB  has  prepared  an 

assessment  of  the  draft  law’s  provisions  against  relevant  practices  in  the  euro  area,  in  particular 

the legal requirements for the euro and the legal tender status of euro banknotes. 

8  
9  
10  
11  

Consolidation Act no. 1022 of 13 August 2013, as amended. 

See the explanatory notes to Section 81 of the draft law. 

See the explanatory notes to Section 81 of the draft law. 

See Protocol (No 16) to the Treaty on certain provisions relating to Denmark. 

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2.2  Under  the Treaty,  the European System of Central Banks  (ESCB)  is  required to act, inter alia,  in 

accordance  with  the  principle  of  an  open  market  economy  with  free  competition,  favouring  an 
efficient  allocation  of  resources12.  The  ESCB  has  the  basic  task  of  promoting  the  smooth 
operation  of  payment systems13, and the ECB has the exclusive right to authorise the issue of 
euro banknotes within the Union14. The euro banknotes issued by the ECB and the national central 
banks of the euro area are the only banknotes with legal tender status within the Union15. 

2.3  The  scope  and  effects  of  the  legal  tender  status  of  euro  banknotes  and  coins  has  not  yet  been 

defined in Union law. Therefore, the legislators of the euro area Member States remain competent 

to  implement  the  scope  and  effects  of  legal  tender  in  their  national  laws.  According  to  the 

Commission Recommendation of 22 March 2010 on the scope and effects of legal tender of euro 
banknotes  and  coins16  (hereinafter  the  ‘Commission  Recommendation’),  the  concept  of  legal 

tender  of  the  euro  should  rely  on  three  main  elements.  First,  there  should  be  a  mandatory 

acceptance  of  banknotes  and  coins  unless  the  parties  have  agreed  on  other  means  of  payment. 

The acceptance of euro banknotes and coins as a means of payment in retail transactions should 

be the rule. A refusal to accept cash should be possible only if it is based on reasons related to the 

‘good  faith  principle’.  Second,  banknotes  and  coins  should  be  accepted  at  full  face  value.  Third, 

banknotes and coins should have the power to discharge debts.  

2.4  Although  electronic  payment  instruments  are  increasingly  used  as  the  preferred  form  for  retail 

payments in a number of Member States, including Denmark, the ECB notes that cash continues to 

play  an  important  role  in  society.  While  in  1991  cash  payments  accounted  for  some  60%  of  the 
value of all retail turnover in Denmark, the figure in 2015 was around 20%17. The ability to pay in 

cash remains particularly important for certain groups in society that, for various legitimate reasons, 

prefer  to  use  cash  rather  than  other  payment  instruments.  These  groups  include  the  disabled, 
senior  citizens, socially vulnerable citizens and minors18. Cash is generally  also  appreciated  as a 

payment  instrument  because  it  is  widely  accepted,  fast  and  facilitates  control  over  the  payer’s 

spending. Moreover, it is the only payment instrument that allows citizens to settle a transaction in 

central bank money instantly. 

2.5  The Commission Recommendation states that the acceptance of payments in cash should be the 

rule,  but  acknowledges  that  cash  may  be  refused  for  reasons  related  to  the  good  faith  principle, 

without  this  being  a  breach  of  the  legal  tender  status  of  cash.  Neither  Union  law  nor  the 

Commission  Recommendation  explicitly  addresses  if  and  to  what  extent  it  may  be  permissible  to 

introduce  a  more  general  limitation  to  the  obligation  to  accept  euro  cash  payments.  Therefore, 

12  

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18  

See  Article 127(1)  of  the  Treaty  and  Article  2  of  the  Statute  of  the  European  System  of  Central  Banks  and  of  the 
European Central Bank (hereinafter the ‘Statute of the ESCB’). 
Article 127(2) of the Treaty and Article 3.1 of the Statute of the ESCB. 
Article 128(1), first sentence of the Treaty and Article 16, first sentence of the Statute of the ESCB. 
Article 128(1), third sentence of the Treaty and Article 16, third sentence of the Statute of the ESCB. 
OJ L 83, 30.3.2010, p 70. 
See also Danmarks Nationalbank’s Opinion on the draft law, available at www.nationalbanken.dk and page 5 of the 
Danish Payments Council’s Report on the Role of Cash in Society, August 2016. The Danish population also has the 
highest use of payment cards among the populations of the European Union according to the 2015 statistics on non-
cash  payments.  See  European  Central  Bank,  Press  Release:  Payment  Statistics  for  2015  (26  September  2016), 
Annex (Relative importance of the main payment instruments in the EU (2015)). 
See pages 37-41 of the Danish Payments Council’s Report on the Role of Cash in Society, August 2016. 

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Union law has to be interpreted in order to establish the conditions that a limitation on payments in 

euro  notes  and  coins  must  fulfil,  including  which  conditions  should  be  fulfilled  to  comply  with  the 

legal  tender  status  of  euro  banknotes  and  coins  when  introducing  general  limitations  to  the 

obligation to accept cash payments. In particular, with respect to limiting cash payments, recital 19 
of Council Regulation (EC) No 974/9819 should be taken into consideration. This recital states that 

limitations on payments in notes and coins, established by Member States for public reasons, are 

not  incompatible  with  the  status  of  legal  tender  of  euro  banknotes  and  coins,  provided  that  other 

lawful means for the settlement of monetary debts are available.  

2.6 

Limitations on cash payments should also be effective and proportionate to the objectives pursued 
and should not go beyond what is necessary to achieve such objectives20. This requires, inter alia, 

that,  for  the  settlement  of  monetary  debts  other  lawful  means  of  payment  are  available.  These 

other lawful means of payment should be readily accessible to all citizens in the respective Member 

State.  Any  negative  impact  of  the  proposed  limitations  should  be  carefully  weighed  against  the 

anticipated public benefits. 

2.7  With respect to the requirement for limitations to be proportionate, the ECB notes that the broader 

and more general a limitation is, the stricter should be the interpretation of the requirement for the 

limitation  to  be  proportionate  to  the  objective  pursued.  When  considering  whether  a  limitation  is 

proportionate, the adverse impact of the limitation in question should always be considered and it 

should  also  be  considered  whether  alternative  measures  could  be  adopted  that  would  fulfil  the 

relevant objective with a less adverse impact.  

2.8  Finally, it is of relevance to note that Directive 2014/92/EU of the European Parliament and of the 
Council21 has made it easier for Union citizens to obtain payment accounts and related electronic 
payment services as an alternative to cash22. 

3.  

Specific observations 

3.1  The ECB welcomes the fact that the draft law maintains the right for citizens to pay in cash in most 

circumstances, thereby preserving the role of cash as a generally accepted means of payment. 

3.2  The ECB understands that the Danish authorities have carefully  considered  and  weighed, on  the 

one hand, the anticipated benefits of the proposed limitation and, on the other hand, the potential 

adverse impact of the proposed limitation. In considering whether the conditions for introducing the 

limitation are fulfilled, the ECB notes that other lawful means for the settlement of monetary debts 

are  generally  available  in  Denmark  and  that  the  limitation's  objective  of  combating  crime  may 

qualify  as  a  public  reason  that  justifies  such  a  limitation,  provided  the  anticipated  benefits  of  the 

limitation  outweigh  its  potentially  adverse  impact.  With  regard  to  the  condition  that  the  limitation 

should  be  effective  and  proportionate,  the  ECB  notes  that  it  is  not  specifically  described  in  the 

19  
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22  

Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (OJ L 139, 11.5.1998, p. 1). 

See Opinion CON/2014/37. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 

Directive 2014/92/EU of  the  European  Parliament and of the Council of 23  July  2014 on the comparability  of  fees 
related to payment accounts, payment account switching and access to payment accounts with basic features (OJ L 
257, 28.8.2014, p. 214). 

Directive 2014/92/EU has been implemented in Denmark by Act no. 375 of 27 April 2016. 

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explanatory  notes  to  the  draft  law  to  what  extent  alternative,  and  equally  or  more  effective 
measures  could  be  adopted  that  would  also  fulfil  the  objective  of  the  draft  law23.  Against  this 

background, it is difficult for the ECB to assess whether or not the limitation could be considered 

proportionate to the objective pursued.  

3.3  The  ECB  notes  that  it  should  be  ensured  that,  to  the  extent  that  a  payee  accepts  cash,  no 

surcharges are imposed on cash payments. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 21 March 2017. 

[signed] 

The President of the ECB 

Mario DRAGHI 

23  

The  ECB  is  aware  that  three  different  models  for  a  limitation  of  the  obligation  to  receive  cash  payments  were 
considered in the Danish Payments Council’s Report on the Role of Cash in Society of August 2016. However, the 
explanatory notes to the draft law do not mention any other models nor do they explain why the model set out in the 
draft law was chosen.  

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