While the Minister of Justice, Mr. Gerald Darmanin, suggested before the Senate’s committee of inquiry on financial crime, on Thursday 22 May 2025, that the elimination of cash could be an effective measure to combat drug trafficking, it is worth examining the rules that already govern cash payments in France.
Cash payments must be accepted, with exceptions
Cash payment, also referred to as “liquid funds” or “currency,” refers to the use of fiduciary money, i.e., banknotes and coins that are legal tender, to settle debts or purchase goods and services. Under French law, although it is in principle a “normal” method of payment, its use is strictly regulated (Art. L. 112-6 of the French Monetary and Financial Code). This regulation aims to ensure proof of transactions, prevent tax fraud, money laundering and the financing of terrorism, and ensure the traceability of financial flows.
The principle of the validity of cash payments provides that payment in legal tender must be accepted, with exceptions. A merchant who refuses a cash payment without authorization is liable to a fine of 150 euros (Art. R. 642-3 of the French Criminal Code).
However, there are several situations in which a cash payment may be refused:
- Payment in foreign currencies.
- Payment with coins or banknotes in poor condition that could be refused by the Banque de France. It is possible, under certain conditions, to exchange or obtain reimbursement for such banknotes or coins from the Banque de France or at certain post offices.
- Payment with counterfeit money; the creditor may refuse the payment if they detect it.
- Payment of more than 50 coins for a single transaction, except for payments made to the Public Treasury.
- When the debtor does not provide exact change, i.e., does not pay the exact amount due. The creditor has the right to refuse a banknote or coin of a value exceeding the amount owed if they do not have sufficient change to return the difference. The obligation to provide exact change falls on the debtor.
- For technical or security reasons. For example, certain merchants operating at night may refuse cash for security reasons, or parking meters may refuse cash to protect against vandalism.
Legal Thresholds and Prohibitions
Cash payments are subject to legal thresholds that vary depending on the debtor’s tax residence and the nature (professional or otherwise) of the transaction. These thresholds apply in particular to payments made to a professional or between professionals, as well as with non-residents.
The main thresholds are as follows (Article D. 112-3 of the French Monetary and Financial Code):
- For a purchaser who is tax-resident in France (whether a merchant or not), the threshold is set at 1,000 euros.
- For a non-resident purchaser who is a merchant, the threshold is also 1,000 euros.
- For a non-resident purchaser who is not a merchant, the threshold is set at 10,000 euros (reduced from 15,000 euros before 1 October 2018).
- This threshold remains at 15,000 euros for a non-resident purchaser acting in a private capacity, when paying a debt in cash to a professional subject to anti-money laundering and counter-terrorism financing obligations. This applies, for example, to the purchase of a vehicle for private use by a non-resident.
These thresholds do not apply if you have no other means of payment or no bank account. For any payment exceeding 1,000 euros, proof of identity may be requested.
Specific rules also apply in certain contexts:
- Cash payments at public finance offices for the settlement of taxes and duties are limited to 300 euros.
- For salary payments, cash payment is only possible if the amount is less than 1,500 euros per month. Beyond this threshold, the employer must pay by crossed cheque or bank transfer. An employer who fails to comply with this rule is liable to a fine of 450 euros. This threshold does not apply to employers who have no other means of payment or no bank account. The employee may request to be paid in cash if the amount is less than 1,500 euros, and the employer cannot refuse.
- For real estate transactions carried out by or received by a notary, cash payment is only possible if the transaction does not exceed 3,000 euros. Beyond that amount, bank transfer is mandatory.
- For rent payments by tenants, payment may be made by any means, including cash, provided the amount is less than 1,000 euros. The landlord cannot require automatic debit.
There is a notable exception to the legal thresholds: payments made between private individuals not acting for professional purposes are not subject to these maximum limits.
Failure to comply with these thresholds results in penalties. A cash payment exceeding the authorized thresholds is considered irregular under economic regulatory law. Offenders, both the payer and the professional who accepted the payment, are liable to a tax fine of up to 5% of the amounts improperly paid in cash (Article L112-7 of the French Monetary and Financial Code). It is important to note that, while irregular and subject to penalties, a payment made in excess of the thresholds is not necessarily void under insolvency law.
Proof of Cash Payment
Proving a cash payment can be difficult, especially in the event of a dispute. It is strongly recommended, particularly for the employer or debtor, to require the signing of a receipt with each cash payment.
Proof of a cash payment through witness testimony is permissible for amounts below 1,500 euros. However, above this threshold, a legal transaction involving a sum or value exceeding 1,500 euros must be proven by a private or authenticated written instrument, except for exceptions provided by the Civil Code (such as the existence of a beginning of written proof or a case of force majeure).
Regulation of Cash-Back
Cash-back, which allows the withdrawal of cash from a merchant during a bank card purchase, is an authorized but strictly regulated practice. To benefit from this service, the purchase payment transaction for goods or services must have a minimum amount of 1 euro. The maximum amount of cash that can be withdrawn is set at 60 euros. This service is reserved for non-professional use and must be made at the express request of the consumer during a purchase (Article D. 112-6 of the French Monetary and Financial Code).
Merchants who offer the cash-back service have clear disclosure obligations towards consumers. They must display or indicate on their website:
- The list of payment instruments accepted or refused.
- The minimum amount of the purchase payment transaction.
- The maximum amount of cash that can be withdrawn.
- Whether the service is free or paid, and, where applicable, the fees charged including all taxes.
Failure by merchants to comply with these regulations may result in a fine of 1,500 euros, or even 3,000 euros in the event of a repeat offence (Article R. 112-7 of the French Monetary and Financial Code).
Reporting and Control Obligations
In the context of the fight against money laundering and terrorist financing (AML-CFT), reporting and due diligence obligations are imposed on certain actors.
Credit institutions and similar entities must report to Tracfin any fund transfer transaction initiated by a cash deposit or by means of electronic money where it exceeds 1,000 euros per transaction or reaches 2,000 euros cumulatively per client over a calendar month.
Certain professionals, such as dealers in precious metals, antiques and works of art, are subject to AML-CFT obligations when the value of a transaction (or series of linked transactions) reaches or exceeds 10,000 euros. They are subject to enhanced controls and heightened due diligence obligations. They are also required to file a suspicious transaction report with Tracfin if the capital movements appear to originate from illegal activities or to be potentially linked to the financing of terrorism.
In conclusion, while cash payment is a fundamental method of settlement in France, its use is nevertheless strictly regulated by thresholds, proof requirements, and due diligence and reporting obligations. These measures are primarily aimed at combating fraud, money laundering and the financing of terrorism. Exceptions exist, particularly for payments between private individuals not acting for professional purposes. Failure to comply with these rules exposes parties to administrative and tax penalties, although this does not automatically render the payment void. Modern practices such as cash-back are also integrated into this regulatory framework, subject to limited amounts and transparency requirements. It is recommended to always verify the applicable rules and specific obligations depending on the context of each transaction.
