The right to pay cash
Many are wondering whether businesses may refuse cash payment and whether it is legal for them to accept card payments only.
Under the Central Bank Act, banknotes and coins are legal tender. But what does this actually mean?
What does the law say?
Section 3-5 (1) of the Central Bank Act states that Norges Bank’s notes and coins are legal tender and furthermore, that no one is obliged to accept more than 25 coins of each denomination in any one payment. Beyond this, the Act does not elaborate further on what legal tender implies.
Section 2-1(3) of the Financial Contracts Act states that a consumer is in all cases entitled to effect settlement with the recipient of the payment in legal tender. “Consumer” means a natural person who does not intend for the good or service to be paid for to be used primarily in business activity.
The Norwegian Consumer Authority is the appeals body for consumer cases concerning enforcement of the rule regarding consumers’ right to pay cash: Consumers must in all cases have the right to pay cash – The Consumer Authority (in Norwegian only)
In 2013, the Ministry of Justice and Public Security issued a statement of principles/interpretation of the provision of the Financial Contracts Act on this point (in Norwegian only). Further questions regarding the interpretation of the Financial Contracts Act may be directed to the Ministry.
Norges Bank has concluded that the scope of this provision is still disputed and unclarified. In a letter to the Ministry of Finance on 31 January 2019, Norges Bank pointed out the importance of cash to an efficient payment system and that Section 38 (the current Section 2-1) of the Financial Contracts Act should be clarified:
- The scope of the provision should be clarified so that a consumer’s right to pay cash cannot be contracted away by standard terms and conditions at locations where goods and services are offered to the general public.
- Granting the King authority to issue a regulation to regulate the scope of the provision in cases of doubt should be considered, as well as making exemptions from the provision when warranted by special considerations.
- Failure to comply with the mandate should be subject to clearer sanctions, eg so that the Norwegian Consumer Authority is granted authority to impose fines for violation of the provision.
On 1 September 2022, the Ministry of Justice and Public Security circulated for comment a bill intended to strengthen the consumer’s right to pay cash. Read more about the consultation here: Consultation – strengthening consumers’ right to pay cash – amendments to the Financial Contracts Act relating to payment settlement - regjeringen.no (in Norwegian only).