Accepting Legal Tender
Legal tender means that the medium of exchange is recognised by law to be valid for settling of debt or meeting a financial obligation (e.g. payment for goods and services). It does not, however, mean that legal tender in all quantities and denominations must be accepted as payment under all circumstances.
However, a vendor and customer may still use quantities of coins above the legal tender limit, subject to both parties agreeing to do so before entering into the transaction.
Vendors have the discretion to decide how they wish to receive payments, as the payment of goods and services is an agreement between a willing buyer and a willing seller.
In exercising this discretion, vendors usually consider the following factors when deciding their preferred mode of payment:
- Medium of customer interaction (whether online or physical).
- Value of the transaction.
- Cost of acceptance.
- Convenience to customers.
Pursuant to section 13(4) of the Currency Act 1967, vendors may provide a written notice to customers stating either or both of the following:
- If they do not wish to accept as payment for their goods or services, any or all of the denominations of currency notes or coins, the denominations of notes or coins that they will not accept as payment.
- If they wish to limit the quantity of any denomination of notes or coins that they will accept in a transaction, such limit on the quantity.
The written notice serves to allow vendors to highlight the proposed terms of payment to the customer and help inform the customer’s decision on whether to go ahead with a transaction. This aims to strike a balance between providing flexibility to vendors to set the terms of transactions, including the terms of payment, while ensuring that customers are aware of these terms and can decide if they are agreeable before proceeding with the transaction.
If a vendor does not provide a written notice
|If a vendor has not given a written notice prior to a transaction, and a debt has already been incurred at the point of payment, the customer is entitled to make payment in all currency notes and coins, up to the legal tender limit set out in the Currency Act 1967.||A barber has completed cutting the hair of a customer. As the barber cannot undo this service that has already been performed, the customer would have incurred a debt, in this case, the cost of the haircut. The customer is then entitled to make payment using any notes or coins, up to the legal tender limit, if the barber does not provide any written notice stating otherwise.|
|If a vendor does not provide a written notice prior to a transaction and a debt has not been incurred at the point of payment, the vendor may refuse to sell the goods or services if the customer is not willing to accept the vendor’s terms of payment.||A vendor intends to sell a copy of a newspaper to a customer. However, the customer does not agree to the vendor’s terms of payment. The vendor is still able to resell the same newspaper to another person. In this case, the customer would not have incurred a debt and the vendor may refuse to sell the goods or services since the customer is not willing to accept the vendor’s terms of payment.|
You may inform MAS, if a vendor does not display a written notice at their premises to indicate that it is not willing to accept specific denominations as payment and rejects your payment. Please include the following details in the :
- Name and location of the shop (including the full address and telephone number, if possible);
- Date and time of the visit; and
- What the payment was for and details of the payment denomination that were rejected.
If you are a vendor, your written notice should:
- Be in the English language, at the minimum.
- Vendors are encouraged to have the written notice in the four official languages (English, Chinese, Malay and Tamil).
- Be legible, and preferably in print.
- Be provided to your customers prior to any transaction, either by handing out the written notice to the customer or displaying the written notice at your premises.
- If the written notice is displayed at your premises, the written notice should be posted at various conspicuous locations within the premises, such as near the entrance of the store or at all cashier counters.
- It must not be covered in whole or in part by any object or be otherwise concealed in any manner and should have a minimum of 20 font size if printed.
- Reference the and must clearly state the denominations of notes or coins that are not accepted as payment.
- If you wish to place limits on the acceptance of certain denominations of notes or coins as payment, the written notice should specify the denomination of the note or coin and the quantity that will not be accepted.