Q:

Can someone deny cash as the payment method?

There are a small number of restaurants in my area where they do not accept cash for payment. They only accept electronic payments such as credit cards, local debit cards etc.
Is this legal? On most currencies, it is written on the note something along the lines of "this note settles X dollars of debt". If a customer offers to purchase a product or settle the bill for a service they have consumed (e.g. food already eaten, gas already pumped into the car) via cash, can the seller deny it?
On a related topic, must business entities accept cash for invoice settlements? I know that the party receiving the payment can charge a "reasonable fee" for processing the cash (e.g. thousands of coins). Can they, for example, demand the debt be settled by bank transfer only?

A:

The Bank of England actually makes this pretty clear with the following line:

Legal tender has a very narrow and technical meaning, which relates to settling debts. It means that if you are in debt to someone then you can’t be sued for non-payment if you offer full payment of your debts in legal tender.

Essentially, if you are in debt (frequent examples are a taxi ride or a meal at a sit-down restaurant) then you can use legal tender to pay off that debt. But that doesn't necessarily mean they have to accept it. It only means that they cannot sue you if they do refuse to accept it. But the refusal wouldn't itself alleviate the debt either. They could technically return to you at some point and say "ok, fine, we'll take the cash" and you'd still be obligated to provide it to pay off your debt.
It's also worth emphasizing that this only applies to situations where the payment is to alleviate a debt, for services that have already been provided before you are billed. It would not apply while buying groceries at the supermarket. Even restaurants where you pay for your food up-front and then receive it afterwards can refuse cash payment. In those situations the services are prepaid and you are not ever alleviating a debt.

