Smaller shops required to offer non-cash payments now in Latvia

A new requirement for smaller stores has come into force in Latvia. If the turnover of a shop exceeds €50,000 in a year, customers must be able to pay cashless, Latvian Television reports on 6 April.

The regulation requiring smaller traders to provide cashless payments is part of the State Revenue Service’s (VID) plan to curb the shadow economy. However, as the Service itself has acknowledged, this requirement will not lead to significant changes. The Revenue Service does not have precise data on the number of companies that have so far reached a turnover of EUR 50,000 but have not offered the possibility to pay cashless.

However, when the amendments to the law were adopted, it was roughly estimated that the share of such companies was less than 1% of all active taxpayers.

“We are seeing more and more, when receiving services, also natural persons carrying out economic activity, ensure that [the customer] can pay for the service or goods by making a cashless payment,” explained Ilze Jankova, Director of the VID Tax Administration.

Moreover, cashless payments do not mean only card payments, the service said. It is also enough that the customer can pay, for example, by bank transfer or after invoicing. However, card payments are the most common choice. Banks providing these services also pointed out that the new amendments to the law would not significantly change the market situation.

“I think that companies, if they sell something, they have an interest in serving every customer that comes in. And that is why it would probably be foolish not to use the opportunity to install a POS terminal,” said Jānis Diediškis, member of the Industra Bank board.

“However, cashless payments have been introduced gradually. And the latest statistics also show that we have reached a very good level of card payments, which is at 80% in the country, which is a very good indicator. This means that customers like to use cashless payments and in the same way merchants have ensured that these cards are accepted,” added Valda Zute, Head of Payment Cards at BluOr Bank.

Card terminals have become more accessible in recent years – they can now even be used as an app on a mobile phone, used by several smaller businesses.