Limitation of cash payments in Poland from 2024 despite criticism

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Cash payments between consumers and businesses are to be limited to 20,000 zlotys from the start of 2024. The change, which has been criticized by business associations and the ruling coalition’s Junior Party as an attack on civil liberties, will be introduced a year later than expected.

Meanwhile, amid the waning popularity of cash payments in Poland, a widely used network of ATMs has further reduced withdrawal limits in response to rising costs.

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From January 1, 2024, payments from consumers to businesses over 20,000 zlotys (€4,200) will only be allowed by bank transfer, reports Money.pl. Cash payments between companies, currently capped at 15,000 zlotys, are to be limited to 8,000 zlotys (€1,680) under the new regulations.

The changes will come into effect 12 months later than planned by the government after President Andrzej Duda signed an amendment to the mortgage credit law. The change was originally due to come in the form of an amendment to the Consumer Rights Act from January 1, 2023.

“Business-to-business transactions should be transparent and non-monetary,” the finance ministry argued when the changes were first presented. Experts said its aim was to “reduce the gray economy”, reported Rzeczpospolita when they were first mentioned as part of the government’s Polish Accord reform programme.

At a press conference, Marcin Warchoł, deputy justice minister of the United Poland party (Solidarna Polska), called reports of impending restrictions on cash payments “fake news”. He boasted that his party had “protected money and freedom”, although commentators pointed out that change had only been delayed, not abandoned.

“This is good news for everyone who loves freedom,” Money.pl quoted Warchoł as saying. “Cash also means the freedom and security of the citizen to buy goods and pay for services without the need to create an account or pay by card,” he added.

The changes were criticized by organizations such as the Union of Entrepreneurs and Employers (FPP), which said in a statement that “cashless forms of payment are undoubtedly growing, but many consumers still prefer cash – whether out of habit or for other reasons (such as to protect privacy)”.

The FPP also notes that Poland was a pioneer in cashless technology and that some 47.3% prefer to make such payments, although 32.6% still prefer using more traditional payment methods.

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“Reducing the circulation of cash at a time of major geopolitical tensions and war in Ukraine could pose a threat to the state’s cybersecurity,” the union added, as quoted by Business Insider.

Michał Borowski of the Business Center Club agreed, telling Money.pl that since banknotes are legal means of payment in Poland, the introduction of limits on transactions is an intrusion on civil liberties.

Adam Glapiński, the head of the Polish central bank, has always been an advocate of cash. Last year he praised the “sense of freedom” it provided, coupled with the anonymity of payment for goods – “this is very important for a market economy, based on freedom of economic choice for businesses and consumers”.

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In another development, Euronet, which owns about a quarter of ATMs in Poland, has reduced the maximum amount that can be withdrawn to 800 zlotys (€168) from 1,000 zlotys. Other networks, including Planet Cash, have also reduced limits in recent years.

This continues a gradual reduction in limits, which until 2017 ranged between 2,500 and 4,000 zlotys for Euronet machines, Business Insider reports.

The number of ATMs has also decreased in Poland as card payments for small transactions become more popular. There are currently 20,888, down 9% from the end of 2018.

“The amounts we receive from payment processors and banks do not cover the costs of managing withdrawal transactions, and the situation is aggravated by recent cost increases associated with macroeconomic factors beyond our control,” Euronet said. in a statement explaining the change.

Main image credit: Flickr/Dariusz Gąszczyk (under CC BY 2.0)



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