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Post Reply: Parliament Considers Bill to Mandate Cash Acceptance for Transactions Up to Sh100,000

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on July 31, 2025, 8:26 am</div><div id="pl-7340"  class="panel-layout" ><div id="pg-7340-0"  class="panel-grid panel-no-style" ><div id="pgc-7340-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-7340-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="1 1 []">A new legislative proposal in Kenya aims to ensure that businesses across the country accept cash payments for transactions up to Sh100,000, addressing the growing trend of cashless operations that has left some consumers, particularly the elderly and those without access to digital payment methods, at a disadvantage. The Central Bank of Kenya (Amendment) Bill, 2025, seeks to amend the Central Bank Act to make cash acceptance mandatory for businesses selling goods and services in person, while also prohibiting additional charges for customers who choose to pay with cash.</p>
<p dir="ltr">The bill, sponsored by Suba South MP Caroli Omondi, responds to the increasing number of businesses displaying signs such as "we are cashless" or "we only accept cards," which effectively exclude customers who rely on physical currency. Omondi emphasized that this practice discriminates against vulnerable groups, particularly older Kenyans who may not be familiar with mobile money or digital payment platforms. He argues that the legislation will promote financial inclusion by ensuring that cash, the country's only legal tender, remains a viable payment option.</p>
<p dir="ltr">The National Assembly’s Finance and National Planning Committee, chaired by Vice Chairperson Benjamin Langat, has endorsed the bill and recommended its publication with several amendments. The committee highlighted the importance of safeguarding consumer rights and ensuring that cash remains a valid and accessible method of payment, especially for government services. Langat noted that rejecting coins and notes is unlawful under current Kenyan law, and the bill aims to reinforce this principle by imposing a Sh100,000 fine on businesses that refuse to accept cash payments.</p>
<p dir="ltr">To address practical concerns, the committee proposed exemptions for businesses in high-risk or insecure areas, where handling cash could pose safety risks. Additionally, the bill excludes high-value transactions of Sh500,000 and above from the cash requirement, mandating that such transactions be processed through digital platforms to enhance transparency and traceability. The committee also suggested that Huduma Centres and similar government service points be allowed to remain cashless, except in cases where individuals provide valid reasons for not using electronic payments, such as lack of access to digital infrastructure.</p>
<p dir="ltr">The proposal draws inspiration from international examples, such as Norway, which amended its Financial Contract Act to mandate cash acceptance. Supporters of the bill argue that cash remains essential for financial inclusion, particularly in rural areas and among populations with limited access to technology. They also point to the risks of over-reliance on digital systems, citing a major IT outage in the United States in July 2024 that disrupted cashless payments and left consumers unable to complete transactions. Omondi emphasized that maintaining cash as an option is a matter of good risk management, ensuring that commerce can continue during system failures, sabotage, or natural disasters.</p>
<p dir="ltr">Critics of the bill, however, argue that cashless systems offer significant benefits, including enhanced physical security for businesses and simplified operations. Tax authorities favor digital payments for their improved record-keeping, which aids in revenue collection, while law enforcement agencies support them for their traceability in combating financial crimes such as money laundering. Despite these arguments, the bill’s proponents maintain that consumer choice must be prioritized, allowing individuals to pay with cash, credit cards, or mobile money like M-Pesa without facing discriminatory practices.</p>
<p dir="ltr">The legislative process for the bill is moving forward, with the National Assembly’s Finance and National Planning Committee recommending its publication. If approved, the bill will proceed to the first reading in the National Assembly, followed by public participation, second and third readings, and potential presidential assent. The public participation phase will provide Kenyans an opportunity to voice their opinions on the proposal, which could significantly impact how businesses operate and how consumers access goods and services.</p>
<p dir="ltr">The Central Bank of Kenya (Amendment) Bill, 2025, represents a significant step toward balancing the push for digitalization with the need to maintain equitable access to payment methods. As Kenya continues to embrace technological advancements in its financial sector, this legislation underscores the importance of ensuring that no one is left behind in the transition to a modern economy.</p>
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