From September 20, 2021, large companies and individual entrepreneurs in Cyprus are obliged to accept credit card payments.
They have to install wireless and wired POS terminals and take card payments from Visa, Mastercard, Maestro and UnionPay. Those who break this rule will face a fine of up to 2,000 euros.
Earlier payment terminals were not required. Therefore, payments in doctors' offices, law offices or beauty salons were mostly made in cash.
According to the new decree of the Ministry of Finance, companies and self-employed persons of 85 areas of economic activity will be required to accept payment in cash and credit cards. Thus, the government of Cyprus intends to fight against tax evasion.
Credit cards must also be accepted for payment at pharmacies, restaurants, taverns, mobile snack bars, continuing education centers, campgrounds, car and motorcycle rentals, and dentists' offices.
Exceptions are made for those working in the manufacturing, power generation, newspapers, magazines, publishing houses, film studios, radio stations and those working in the software development sector.
In response to the innovations, Stefanos Koursaris, General Secretary of POVEK (Cyprus Federation of Professional craftsmen and Shopkeepers), said that Cyprus should enforce the law, but that small businesses should be given some exceptions. He stressed that the new payment acceptance system will lead to an increase in operating costs in the context of the crisis caused by the outbreak of coronavirus. Small businesses, such as kiosks, whose customers come in to buy several items at a time, will suffer the most.
With the obligatory acceptance of a credit card, tiny profits will disappear, making small businesses unprofitable. The margins for some products, such as cigarettes, calling cards, milk, newspapers and magazines, are paltry, Koursaris said.
POVEK expects Finance Minister Constantinos Petrides to respond to their call to satisfy and explore the possibility of allowing retailers to sell certain items for cash only.
In particular, POVEK proposes to amend the law, which will allow retailers to accept credit cards only from an amount of more than 10 euros.
It is worth noting that the law obliging retailers to accept plastic money as payment was passed more than a year ago, and at the end of June this year, the Ministry of Finance approved it. By making credit card payments mandatory, Cyprus has brought its national legislation in line with EU directives.
The European Directive on the Provision and Use of Payment Services and Access to Payment Systems states that "no commission is charged for the use of payment instruments subject to interbank charges."
It is expected that from October 2021, tax department inspectors will begin to check the availability of payment terminals in the offices of companies and in the offices of individual entrepreneurs, as well as to fine violators.