The War on Europe’s Cash

calendar iconOct 29, 2021

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From the outset of the pandemic, shoppers around Europe have found their payment choice restricted by businesses refusing cash. Brussels-based news outlet EUobserver recently examined why this is happening—despite authorities consistently defending cash—and what rights EU citizens have when it comes to making payments.

Cash is just as safe to use now as it was before SARS-CoV-2 swept the globe. A European Central Bank study confirms it is unlikely to spread the virus—reinforcing findings from America and Britain—empowering the voices speaking out against payment restrictions rising across the Union. So, given they have no scientific basis, why is it proving so difficult to ensure everyone can pay using their preferred method?

EUobserver reporter Diane Rain has a simple explanation: there’s profit to be made from fees associated with cashless payments that are limited by the existence of cash.

Banks and other companies providing financial services are interested in the transaction fees they receive from cashless payments and offer incentives to merchants and consumers to stop using cash.
"Diane Rain, EUobserver

Rain highlights the urgent message of UNI Europa—the European service workers union—that the European Commission must make it illegal to refuse cash payments in order to save jobs and preserve consumer and citizen rights. Together with other associations, they warn ‘The War on Cash’ is having a negative impact on employment and financial inclusion.

The European Central Bank recognises its “fundamental responsibility, together with the banking sector, to ensure the smooth supply of cash and facilitate the use of cash in payments by people and businesses.” It acknowledges that “cash is an important part of [citizens’] freedom to choose how to pay and essential for the financial inclusion of all groups in society.” However, the EU authorities have ultimately decided that while cash is legal tender within the euro area, it is up to member countries whether or not they enforce universal acceptance of and access to cash.

France is one of the few countries to actively punish companies for refusing cash payments, Rain notes, with its Central Bank reminding merchants early on in the pandemic that they would be fined for restricting payment choice.

Refusing to accept banknotes and coins that have legal tender in France at the value at which they are in circulation is punishable by a fine applicable to class two offences.
"Article R642-3 of the French Criminal Code

In countries where cash is not as well protected, the motivation of cashless profits seemingly outweighs the public good. Rain observes pro-cashless lobbying—mainly from private financial institutions—has accelerated in recent years, becoming “even more aggressive since the start of the global pandemic as companies have falsely claimed that banknotes and coins spread the coronavirus.” A response to this ‘attack on cash’ is needed, and at present too few countries are following the positive example set by France.

Rain concludes the ‘universal acceptance of cash’ sought by the European Central Bank is currently endangered, saying: “Further intervention is therefore needed to ensure that Europe continues to serve as a model for the social and financial inclusion of all its citizens.”

Last Updated: Oct 29, 2021