Payments
Do you still need to take cash? Cash payments in Iceland in 2026
How much Icelanders still pay in cash, what legal tender means, what the Central Bank says about card-only restaurants, and how to decide for your own place.
In this guide
On many evenings the cash drawer barely opens. You count the float at close, take the same notes to the bank, and wonder if it is worth the trouble. Other owners keep cash on purpose, for the guest who prefers it and for the night when the card terminal stops.
This guide gives the law and the numbers as of October 2026, so that you can decide for your own restaurant.
How people in Iceland pay today
Seðlabanki Íslands (the Central Bank of Iceland) estimates that cash is about 2 % of payments at the point of sale. The estimate comes from a consumer survey in 2024.1 Cards are the most common way to pay. In 2024, most payments at the point of sale were made with a card in a phone wallet. Mastercard and Visa have more than 99 % of the card market in Iceland.1
In a survey of household payment habits, people said that they use cash mostly for gifts and for payments between individuals. One third of the people asked had no cash at hand. A survey of merchants in 2024 found that some already refuse cash, and that more are thinking about it.1
The amount of cash in the country is also falling slowly:
| End of 2024 | End of 2025 | |
|---|---|---|
| Cash issued by the Central Bank | 70,9 billion kr. | 69,5 billion kr. |
| Cash held by companies and people (outside the banks) | 63,4 billion kr. | 62,2 billion kr. |
The figures come from the Central Bank’s annual report.3 At the end of 2024, cash outside the banks was at its lowest since the end of 2018, and was about 1,5 % of GDP.1 Some of this cash is savings, not money for shopping, so the total does not show how much people pay with cash.1
There are also fewer places to deposit cash. In the bank’s June 2025 report, Iceland had 68 bank branches, 14 of them in the capital area. In 2010 there were 129.1
What “legal tender” means
The Act on the Central Bank says that notes and coins issued by the bank are lögeyrir (legal tender) for all payments at their full face value.2 The article defines what counts as money. It does not say that every seller must accept cash.
Can a restaurant refuse cash?
In its 2025 report on payments, the Central Bank says that nothing prevents a seller from requiring a specific payment method, whether that is cash or an electronic payment.1 The bank adds that it is fair for the seller to tell customers clearly and obviously in advance. The customer should know the rule before buying and accept it.1
This is the bank’s assessment, not a court ruling or a law. The rule works both ways: a cash-only food truck and a card-only café both need clear notice. If you plan to change, check the details with your lawyer.
Is a law that requires cash coming?
As of October 2026, the government’s lists of planned bills for the 2025–2026 and 2026–2027 sessions of Alþingi have no bill that requires sellers to accept cash.56 Members of Alþingi can still put forward their own bills, so check the Alþingi website before you make a large change.
The Central Bank continues to work on access to cash and on how cash reaches people and businesses.4
How the Nordic countries compare
The Central Bank described the rules in the other Nordic countries in June 2025:1
| Country | The rule for shops and service providers |
|---|---|
| Norway | Since October 2024, they must accept cash up to NOK 20.000, about 250.000 kr. |
| Sweden | They may refuse cash if they post a notice about it. The government is thinking about a law that requires cash for some goods and services. |
| Denmark | The general rule is that they must accept cash. Exemptions include online sales, self-service and night opening. |
| Iceland | No law requires them to accept cash. The Central Bank says that clear notice in advance is fair. |
Cash as a backup
Cash is the only way to pay that does not depend on digital systems. The Central Bank calls it an important backup when electronic payments fail because of a lost connection, a power cut or a fault in the bank systems.1
Cards are also getting a backup. The rollout of offline card payments in Iceland began in July 2026, and the bank is still developing the solution for contactless payments.4 The solution has limits on the card, the amount and the type of purchase. Our guide When the internet goes down explains the details and what to ask your acquirer.
How to decide for your restaurant
Start with your own numbers. Look at sales by payment type for the last three months, and look at single days too. A festival weekend, a ski week or a bus of older guests can look very different from a normal Tuesday. In Resto, the back office shows sales by payment type for any period.
Then think about the cost on each side. Cash takes time: counting the float, finding change, and the trip to the bank. Cards cost a fee on each payment, which our guide Card fees explained breaks down.
If you go card-only
- Put a clear notice at the entrance and next to the POS, before the guest orders.
- Say it on your website, your menu and your listing on map and booking sites.
- Tell the staff what to say, in Icelandic and English, to a guest who has only cash.
- Agree on a plan for an outage, for example a bank transfer or an open check until the terminal works again.
- Check your choice again in six months, with your sales numbers.
If you keep cash
- Keep a float that covers a busy evening, and count it at the start and the end of each shift.
- Decide how often someone takes cash to the bank, and where the nearest branch or deposit machine is.
- Record every cash sale on the POS, so that the end-of-day count matches the report.