Legal tender and electronic payments – can we insist on paying in cash?

When a tourist tried to pay for a burger in cash at a Tsim Sha Tsui restaurant in 2023, staff refused. The outlet accepted only cards and electronic wallets.

The episode went viral, with debate raging over whether or not this is legal.

After all, Hong Kong bank notes and coins constitute legal tender in Hong Kong under the Legal Tender Notes Issue Ordinance and the Coinage Ordinance, and the concept of legal tender is enshrined in the Basic Law (Article 111). What’s the use of having legal tender if shops can refuse to accept them willy-nilly?

The answer lies in common law’s approach to the concept of legal tender. Rather than compelling acceptance thereof, in most common law jurisdictions, the freedom of contract reigns supreme.

In commercial transactions, both parties may agree their own terms – including which payment methods are accepted. Whether a merchant takes notes, coins, credit cards or other means of electronic payments is a commercial decision. Neither the ordinances nor the common law compel acceptance of any particular form of payment.

If so, does this mean that “legal tender” is a meaningless phrase? The answer, as usual, is nuanced.