Refusing cash? You could pay hefty price under new law

For many Kenyans, cash remains a lifeline. Whether it's buying food at a roadside kiosk or paying for services in small towns, physical money is still king.

But as more businesses go digital, those without access to mobile money or cards are being left out. A new proposal in Parliament now seeks to reverse that.

A fresh Bill is pushing for mandatory acceptance of cash in day-to-day transactions, warning that failure to comply could attract fines of up to Sh100,000.

The Central Bank of Kenya (Amendment) Bill, 2025, is designed to protect individuals who still depend on cash for their daily needs.

If passed, the law would require all businesses that sell goods and services in person to accept cash payments for transactions not exceeding Sh100,000. It also prevents businesses from charging higher prices to customers who choose to pay with cash.

"The Bill mandates that businesses selling goods and services in person must accept cash payments for transactions of up to one hundred thousand shillings. Additionally, it prohibits businesses from charging higher prices to customers who choose to pay with cash, thereby promoting fairness in payment options," reads the Bill.

The idea is simple but timely: no one should be turned away simply because they choose or are forced to pay in cash.

The Bill is sponsored by Suba South representative Caroli Omondi, who says many people still rely on cash due to lack of access to technology or knowledge of digital systems.

He argues that rejecting cash payments unfairly discriminates against older citizens and those in remote areas.

"By ensuring that businesses cannot refuse cash or impose unfair pricing policies, the Bill seeks to protect consumer rights and eliminate discrimination based on payment methods. Furthermore, providing clear legal guidelines on the acceptance of cash payments, the Bill enhances legal certainty and encourages compliance among businesses," reads the Bill.

The law, however, only applies to physical sales, meaning it targets places where buyers and sellers interact in person.

Those who breach the rule could face a fine of up to Sh100,000, in addition to any civil claims that could arise from affected customers.

"A person who contravenes this section shall, in addition to civil damages that may be pursued by an aggrieved party, be liable upon conviction to a fine not exceeding one hundred thousand shillings," the Bill states.

Still, the Bill provides room for exceptions. If a seller cannot take cash due to a system failure that prevents cash handling or lacks enough money to offer change, they would not be penalised.

"Subsection 1 on payment of cash shall not apply to a person if the person is unable to accept cash because of a sale system failure that temporarily prevents the processing of cash payments or insufficiency of cash on hand to give as change," it adds.

The push for the new law comes as more shops put up signs that say "we are cashless" or "only card payments accepted."

While these signs reflect a shift to convenience and efficiency, critics argue they are leaving some people behind.

Digital payments have become popular, but Omondi believes they are not a substitute for legal tender.

"Suddenly and without warning, the exchange of goods and services stopped with the IT outage. Buyers were unable to effect cashless payments. Everyone was in need of immediate cash to make payments," he said, referring to a massive IT outage in the US in 2024 that halted all digital transactions.

"As a matter of good risk management, the option for cash payments should at all times be available to deal with instances of widespread IT outages due to system failures, deliberate sabotage, or natural disasters."

He added that, "Legal tender represents the sovereign collective agreement amongst all citizens as to how they will pay for the exchange of goods and services and hence its constitutional underpinning."

He also highlighted that cash allows vendors to get full value for their goods and services without facing deductions through transaction charges or service fees, which mostly benefit third parties.

According to him, many Kenyans are either unbanked or have limited access to credit cards. Even those with accounts may have poor credit ratings, making them ineligible for digital services.

Omondi pointed to a global example, noting that Norway recently amended its financial laws to make cash acceptance mandatory, a move that aligns with the spirit of the Bill.

Those in favour of cashless systems point to easier accounting, better revenue tracking, and less risk of theft.

But for many ordinary Kenyans, access to digital payment systems is still out of reach.

The proposed law seeks to bridge that gap.

If this Bill becomes law, it could restore confidence in the use of cash and help ensure that no one is locked out of basic services simply because they carry banknotes instead of a smartphone.