Cash payments: limit for companies to pay or collect

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The sale of a product or the provision of a service automatically entails payment: this is the basis of any business. That is why companies provide a wide variety of payment methods in order to speed up the process and offer the customer the option with which they feel most comfortable.

Cash has been losing its role in commercial transactions over the past few years. The convenience of electronic payments has made physical coins and notes less of a concern. Some have even dared to predict that cryptocurrencies will eventually displace them. But they remain important in everyday life and are still the preferred method for many.

For reference, in Spain before the pandemic up to 87% of payments were made in cash compared to the European average of 79%. However, things have changed radically since the pandemic. According to the OCU, during 2021, 80% of Spaniards have preferred to use a card instead of cash, and 63% Bizum . Other alternatives such as PayPal, Apple Pay and Google Play follow suit.

And just like other aspects that have affected companies, such as the implementation of teleworking , the Covid-19 pandemic has reduced physical contact to a minimum . This has accelerated the choice of many people to pay online or with their own mobile phone. However, cash is holding up .

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Cash payments still have many advantages. Cash remains colombia number data very important in certain social groups or rural areas for various reasons. It remains a fast, reliable instrument free of charges or commissions in its operations. The European Central Bank considers cash to be an essential means of payment for the elderly, immigrants or people with disabilities, socially vulnerable citizens and those with limited access to digital services.

Cash limits in Spain
Apart from the new contactless payment options, the Spanish Government has taken measures to discourage the traditional exchange of notes and coins. Cash payments have thus seen their maximum permitted amount drastically reduced in recent years. Law 11/2021 has set the maximum limit for cash payments at 1,000 euros .

The measure aims to prevent and combat tax fraud. This limit was previously set at 2,500 euros since 2012. And this limit also includes commercial transactions, i.e. those in which one of the parties involved acts as a businessman or professional. But it does not affect individuals or payments made to financial institutions .

This means that for payments over 1000 euros, a bank transfer must be made or another method used to record the payment . The law is clear for those cases in which this limit is exceeded: the fine can be equivalent to 25% of the amount paid in cash. In addition, the Treasury can apply it to both parties , that is, both the payer and the recipient of the cash. The exemption from this fine applies when one of the parties reports the other for this fact.

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Apart from this, payments cannot be split to avoid the limit. That is, if the transaction amounts to 2000 euros, the payer will not be able to hand over 999 euros in cash and other1001 athrough another means. It should be noted that when referring to cash, the law also includes other material methods that may be accepted as a means of payment, such as gold or other metals.