New Bill seeks to make cash payments up to Sh100,000 mandatory for all Kenyan businesses
The proposed law seeks to amend the Central Bank Act by making it mandatory for businesses to accept cash for goods and services, and prohibits additional charges for customers who choose to pay in cash.
Businesses in Kenya could soon be legally required to accept cash for payments of up to Sh100,000, following a parliamentary committee's endorsement of a Bill aimed at preserving the use of physical currency.
The proposed law—the Central Bank of Kenya (Amendment) Bill, 2025—seeks to amend the Central Bank Act by making it mandatory for businesses to accept cash for goods and services, and prohibits additional charges for customers who choose to pay in cash.
The National Assembly’s Finance and National Planning Committee has recommended the Bill’s publication, arguing that it will safeguard consumer rights and ensure cash remains a valid and accessible method of payment, including when accessing government services.
“The Bill mandates that businesses selling goods and services in person must accept cash payments for transactions 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,” the proposal states.
Progressive
During a meeting chaired by Vice Chairperson Benjamin Langat, the committee held discussions with the Bill’s sponsor, Suba South MP Caroli Omondi, and described the proposal as progressive. The committee resolved to recommend the Bill’s publication with amendments.
Langat underscored that coins and notes are the only legal tender in Kenya, and rejecting them is unlawful.
“We will recommend to the Speaker for the Bill to be published with amendments,” he said.
“All payments should be available so that if I want to pay with credit card, cash, or M-Pesa, I can be assisted.”
Homa Bay Town MP Peter Kaluma echoed this sentiment, saying the refusal to accept cash unfairly discriminates against vulnerable groups.
“If our currency is the legal tender, then why should someone refuse to take it? Persons with disability are suffering,” Kaluma said.
The committee also backed a proposal to impose a Sh100,000 fine on businesses that refuse to accept cash payments. However, members recommended several amendments before the Bill is published. These include exempting businesses in high-risk or insecure areas from the cash requirement for safety reasons.
Cashless service points
To improve service delivery and reduce corruption, the committee proposed that Huduma Centres and similar government service points be allowed to remain cashless, unless individuals demonstrate valid reasons for not using mobile or electronic payments.
It also recommended that high-value transactions of Sh500,000 and above be excluded from the cash requirement and processed through digital platforms instead.
Langat added that the amended Bill would include a clear legal provision holding any business that refuses to accept cash liable for non-compliance.
Turkana South MP John Ariko stressed the need to continue promoting digital payments, especially in government transactions, for accountability and transparency.
Defending the Bill, MP Caroli Omondi said many Kenyans—especially the elderly—still rely heavily on cash and are excluded from mobile money services like M-Pesa.
“The majority of Kenyans still rely on cash transactions, while some elderly people do not know how to use M-Pesa services. Denying them the right to pay in cash is discriminatory,” he said.
He added that many people lack access to smartphones or the internet, making cashless options impractical.
“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.”
Digital systems vulnerabilities
Omondi also pointed to global vulnerabilities in digital systems, referencing the July 2024 global IT outage in the United States, which disrupted financial operations and highlighted the risks of relying solely on cashless transactions.
He argued that cash ensures the full value of a sale is retained by businesses, unlike digital payments that involve deductions by service providers or government levies.
“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 said.
Omondi noted that many Kenyans remain unbanked, lack credit cards, or are excluded from digital finance due to poor credit histories or bad debt.
The proposed legislation also draws inspiration from international precedent, with Norway having amended its Financial Contract Act to make cash acceptance mandatory.
While critics of the Bill argue that cashless systems enhance physical security and simplify operations, supporters counter that cash remains essential for financial inclusion.
Tax agencies favour digital payments for improved record-keeping, and law enforcement supports them for their traceability in combating financial crime.
If published, the Bill will proceed to the first reading in the National Assembly, followed by public participation, second and third readings, and possible presidential assent if passed.
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