Finance Ministry Plans Cash Compulsion Ban for 2027

The Federal Ministry of Finance, led by Lars Klingbeil (SPD), plans to introduce a legal regulation starting in 2027 that will require shops, restaurants, and service providers to offer at least one digital payment method. This measure aims to increase the acceptance of cashless payments and could particularly affect smaller hospitality businesses that traditionally rely on cash transactions. The suspicion that some hospitality establishments may be bypassing tax obligations through cash payments is cited as one of the reasons for this initiative. However, the new regulations are not intended to completely eliminate cash from payment transactions. Customers will still have the option to pay in cash.

Businesses will have the freedom to choose which digital payment method they wish to offer. This can include card payments as well as payments via smartphone or smartwatch. It is important that at least one European procedure is available, with no financial minimum threshold set for digital payments. This means that even small amounts can be paid with cards. A central point of the legislative proposal is that no additional costs may arise for the use of digital payment methods.

This could pose a challenge for many businesses, as they will need to invest in card readers and bear transaction costs. The regulation could be particularly problematic for smaller businesses that often have limited financial resources. Currently, shops and restaurants are allowed to refuse card payments and insist on cash payments. The planned changes would fundamentally alter this practice. The Finance Ministry has already begun coordinating the key points of the law with other ministries to gather their feedback.

However, exceptions to the new obligation to accept digital payment methods are planned. Non-profit organizations, such as amateur sports clubs and charitable associations, will still have the option to accept cash only. This regulation could help minimize the financial burdens for such organizations. The introduction of the new regulations is expected to be discussed in the Bundestag after all amendments have been incorporated and the draft law has been approved by the cabinet. The exact timeline for implementation is still being determined, but the goal is to have the regulation in place by 2027.

The discussion about the future of cash in Germany is not new. In recent years, the use of cashless payment methods has increased, particularly during the COVID-19 pandemic when many consumers switched to digital payments for hygiene reasons. According to a survey by the German Trade Association (HDE) from 2025, 65% of Germans already regularly use cashless payment methods. The planned changes could also impact consumers, who will need to adapt to the new payment methods. The acceptance of digital payments could be further promoted by the legal regulation, potentially leading to a long-term reduction in cash transactions.

According to a study by the German Institute for Standardization (DIN), the share of cashless payments could rise to 80% by 2030. The debate over the pros and cons of eliminating cash continues to be controversial. Proponents argue that digital payment methods are safer and more efficient, while critics point to the risks of surveillance and the loss of anonymity. However, the federal government has not officially spoken out against cash and emphasizes that it will continue to be available as a payment method.

The key points of the law are to be finalized in the coming weeks before the draft law is introduced to the Bundestag. Finance Minister Klingbeil has announced that citizens and businesses will be comprehensively informed about the planned changes to ensure a smooth transition. "We want to advance the digitization of payment transactions without overwhelming people," Klingbeil stated in an interview. "Cash remains an important payment method, but we must also utilize the opportunities of the digital world."