Non-Cash Payment Policy Sparks Public Debate: Merchants Legally Obligated to Accept Cash

The recent viral video on TikTok showcasing a customer’s protest against a renowned bakery’s exclusive QRIS (Quick Response Code Indonesian Standard) payment policy has ignited a significant public debate across social media platforms in Indonesia. The incident, which occurred on Friday, December 19th, highlights a growing tension between the government’s push for digital transactions and the fundamental right of citizens to use legal tender. The video, posted by TikTok user @arlius_zebua, depicted an elderly woman being denied a purchase of bread because she attempted to pay with cash, with the store insisting on QRIS payment.

The Core of the Controversy: Cash vs. Digital Mandate

The protester in the viral video questioned the legality and fairness of the bakery’s refusal to accept cash. He emphasized that cash, specifically the Indonesian Rupiah, remains a legally recognized and valid medium of exchange. His primary concern was the disproportionate burden this policy places on elderly individuals who may not be familiar with or have access to digital payment technologies. This situation raises a critical question: Are merchants, whether individuals or businesses, legally permitted to reject cash payments and exclusively enforce QRIS transactions?

Legal Framework: The Unwavering Status of Cash

At its core, the implementation of non-cash payment systems, such as QRIS, is intended to enhance convenience and offer flexible payment alternatives. However, it is crucial to understand that these digital methods are designed as options, not as mandatory replacements for physical currency. The optional nature of digital payment systems underscores a fundamental principle: the legal status of the Indonesian Rupiah as legal tender cannot be abrogated. Consequently, businesses are legally bound to accept cash as a valid form of payment.

Merchants’ Obligation and Legal Ramifications

Merchants who unilaterally refuse cash transactions risk violating prevailing regulations in Indonesia. The obligation to accept cash as legal tender is explicitly stipulated in Law No. 7 of 2011 concerning Currency. This law unequivocally states that the Rupiah is the sole legal tender in the Republic of Indonesia.

Bank Indonesia, through its Executive Director of the Communication Department, Ramdan Denny Prakoso, has reiterated this legal obligation. Citing Article 33, paragraph (2) of Law No. 7 of 2011, Prakoso warned that any individual or entity is strictly prohibited from refusing the Rupiah as a valid payment instrument.

The specific wording of Article 33, paragraph (2) is particularly stringent: "Any person shall be prohibited from refusing to accept Rupiah which is tendered as payment or to settle an obligation that must be fulfilled with Rupiah and/or for other financial transactions in the Territory of the Unitary State of the Republic of Indonesia, unless there is doubt about the authenticity of the Rupiah as referred to in Article 23, shall be punished with imprisonment for a maximum of one (1) year and a fine of a maximum of Rp200,000,000.00 (two hundred million Rupiah)."

This legal provision clearly indicates that the only justifiable reason for a merchant to refuse cash is if there is a genuine doubt regarding the authenticity of the physical Rupiah being offered. Any other reason for refusal, including a preference for digital payments, is considered a violation of the law.

The Role of Bank Indonesia and Legal Precedents

Reinforcing the legal standing of cash, Article 2, paragraph (2) of Law No. 23 of 1999 concerning Bank Indonesia further solidifies the Rupiah’s status as legal tender throughout Indonesia. The law explicitly states, "Rupiah currency is the legal tender in the territory of the Republic of Indonesia."

Furthermore, the explanation of Article 19 of Law No. 7 of 2011 clarifies the forms of currency issued by Bank Indonesia, specifying that it comprises both banknotes and coins. This comprehensive legal framework ensures that all financial transactions conducted within Indonesian sovereign territory must be settled using the Rupiah, encompassing both cash and digital forms, with cash payment being a non-negotiable right.

The Evolution of Digital Payments: A Complement, Not a Replacement

Bank Indonesia’s perspective on non-cash payment systems like QRIS is that they are designed to offer the public more effective and convenient transaction options. The advent of electronic payment methods is intended to complement, not eliminate or marginalize, the use of cash as a legitimate payment tool. The goal is to provide a diverse payment ecosystem that caters to various preferences and technological proficiencies within the population.

The incident at the bakery, therefore, represents a misunderstanding or perhaps a deliberate disregard for these fundamental legal principles and the spirit of inclusive payment systems. While digital payments offer numerous benefits, including speed, security, and reduced handling costs, they should not come at the expense of excluding segments of the population who rely on traditional payment methods.

Broader Implications and Societal Impact

The controversy surrounding the bakery’s policy has far-reaching implications:

• Financial Inclusion: Forcing digital payments can inadvertently exclude vulnerable groups, including the elderly, low-income individuals, and those in areas with limited internet connectivity or smartphone penetration. This runs counter to the principle of financial inclusion, which aims to ensure everyone has access to and can use financial services.
• Consumer Rights: Consumers have a right to use legal tender. Denying them this right infringes upon their consumer autonomy and can lead to frustration and distrust in businesses.
• Economic Disparities: While digital transactions are on the rise, a significant portion of the Indonesian population, particularly in rural areas and among older demographics, still predominantly uses cash for daily transactions. A blanket shift to digital-only policies could exacerbate economic disparities.
• Reputational Risk for Businesses: Businesses that implement exclusionary payment policies risk significant backlash, negative publicity, and potential legal challenges. This can damage their brand reputation and alienate a substantial customer base.

Supporting Data and Trends in Digital Payments

Indonesia has indeed witnessed a rapid growth in digital transactions. According to various reports, the value of digital economic transactions in Indonesia has been steadily increasing. For instance, projections indicated that Indonesia’s digital economy transactions could reach $360 billion by 2030, driven by increased adoption of e-commerce, fintech, and digital payment solutions like QRIS. The QRIS system itself has seen remarkable adoption rates, with millions of merchants and users registered since its inception. This growth underscores the increasing comfort and preference for digital methods among a large segment of the population.

However, this trend should not overshadow the persistent reliance on cash. Cash remains a vital payment instrument for many Indonesians, particularly for micro, small, and medium-sized enterprises (MSMEs) and for everyday purchases. The convenience and familiarity of cash, especially for smaller transactions, cannot be entirely dismissed.

Official Responses and Future Considerations

Bank Indonesia’s consistent reinforcement of the legal obligation to accept cash serves as a crucial reminder to all merchants. The institution actively promotes digital payments as a complementary system and emphasizes that the coexistence of cash and digital payments is essential for a robust and inclusive financial ecosystem.

The incident at the bakery, while seemingly isolated, brings to light the need for greater awareness and education among businesses regarding payment regulations. It also highlights the importance of ensuring that the digital transformation in the payment landscape is implemented equitably, without leaving any segment of society behind.

Moving forward, it is imperative for businesses to:

• Understand Legal Obligations: Merchants must be fully aware of their legal obligations to accept cash as legal tender.
• Offer Multiple Payment Options: Providing a range of payment choices, including cash, QRIS, debit, and credit cards, caters to a broader customer base and demonstrates a commitment to customer service.
• Prioritize Financial Inclusion: Businesses should consider the needs of all their customers, particularly vulnerable groups, and ensure that payment policies do not create barriers to access.
• Engage in Dialogue: Open communication with customers about payment options and policies can help prevent misunderstandings and build trust.

The viral video serves as a potent reminder that while technological advancements in payments are inevitable and beneficial, they must always be balanced with legal mandates and a commitment to inclusivity. The legal status of cash in Indonesia remains firmly established, and merchants are legally bound to respect this, ensuring that all citizens have the right to transact using the nation’s legal tender.