New Bill seeks to allow cash payments for transactions below Sh100,000

A new Bill before Parliament seeks to make it mandatory for businesses to accept cash payments for transactions below Sh100,000, with violators facing hefty fines as the government seeks to ensure equitable access to payment methods.

According to the Central Bank of Kenya (Amendment) Bill, 2025, businesses selling goods and services in physical locations will be required to accept cash as a form of payment for transactions not exceeding Sh100,000. The Bill also prohibits businesses from charging customers higher prices for choosing to pay in cash, aiming to promote fairness in payment options.

“The Bill mandates that businesses selling goods and services in person must accept cash payments for transactions of up to Sh100,000. 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.

Sponsored by Suba South MP Caroli Omondi, the legislation is intended to protect consumers from what he terms discriminatory practices, especially against the elderly.

“A majority of Kenyans still rely on cash transactions while some older people do not know how to use mobile money services, making it discriminatory to deny them access to services or buying goods in cash,” Omondi said.

He noted that a significant portion of the population lacks access to internet connectivity or smart devices required for digital payments, making cash their only viable mode of transaction.

“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 document.

The Bill introduces penalties for non-compliance, stipulating that: “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 Sh100,000.”

However, it makes provisions for exemptions in cases where accepting cash is practically impossible, such as during system failures or when businesses lack sufficient cash for change.

“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,” reads the Bill.

The proposal comes amid a growing trend of businesses prominently displaying signs that read, “we are cashless” or “we only accept cards,” effectively shutting out cash-paying customers.

While digital transactions through mobile money, credit, or debit cards have surged due to convenience, Omondi insists that such methods do not constitute legal tender under the law.

He cited the July 2024 IT systems outage in the United States as a cautionary tale, arguing that over-reliance on digital systems could prove disastrous.

“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,” Omondi said.

“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.”

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The MP further argued that accepting cash allows sellers to receive the exact value of their goods and services, unlike digital payments which often come with deductions for fees, taxes, or service charges that benefit financial institutions and government agencies.

He also highlighted that many Kenyans remain locked out of the cashless economy.

“A large segment of society cannot access credit or debit cards as they are unbanked, while the banked population also fails credit checks or are suffering financial hardship hence are locked out of all cashless payment systems due to bad debt,” he said.

Omondi’s push for mandatory acceptance of cash mirrors global developments. He pointed to Norway’s recent move to amend its Financial Contract Act to make cash payments a legal requirement.

Despite the Bill’s intentions, advocates of cashless systems argue that digital transactions reduce theft risks, improve record keeping, enhance revenue collection and minimise handling costs for businesses.