A shop in Madrid is allowed to turn down your card. It is not allowed to turn down your cash. Banco de España states the position plainly on its own page about the role of cash: euro banknotes and coins are legal tender, and shops or restaurants cannot refuse them unless they have agreed another means of payment with the customer in advance (Banco de España, El papel del efectivo, checked 15 September 2026). That asymmetry is the opposite of what most visitors assume, and it should shape what you carry.
The second thing to fix before you arrive is the conversion screen. Spanish machines and terminals routinely offer to bill you in your home currency, an arrangement known as dynamic currency conversion, and the markup is set by whoever owns the terminal.
What the cash limit actually binds
Spain's cash payment limit binds operations in which at least one of the parties acts as a business or a professional, and it is not a rule about tourists. Article 7 of Ley 7/2012 sets the threshold at EUR 1,000 or its equivalent in foreign currency, and raises it to EUR 10,000 where the payer is a natural person who can show that their tax domicile is not in Spain and who is not acting as a business or professional (BOE, Ley 7/2012, artículo 7, consolidated text, checked 15 September 2026).
Read that carefully, because the popular version of the rule is wrong in both directions. A coffee, a taxi or a EUR 300 hotel night is nowhere near any of these figures, while a Spanish resident handing a builder EUR 1,000 in notes is caught.
| Who is paying whom | Limit on the operation | What triggers it |
|---|---|---|
| Any payer to a Spanish business | EUR 1,000 | Standard threshold in Article 7 |
| Non-resident private payer to a business | EUR 10,000 | Proof of a tax domicile outside Spain |
| Private individual to private individual | Outside this article | Neither party acts as a business |
The law also closes the obvious workaround. Article 7 requires that, when calculating the threshold, you add together all the operations or part-payments into which a single delivery of goods or supply of services has been split, so paying a EUR 1,400 bill in two envelopes of EUR 700 does not escape it.
The penalty is why sellers, not buyers, usually enforce this. Breach is classified as a grave administrative infringement, the base of the penalty is the amount paid in cash, and the fine is a proportional 25 per cent of that base. Both the person paying and the person receiving are infringers, and they are jointly liable, so the tax agency may pursue either or both.
Cash is the payment they cannot refuse
Cash acceptance in Spain is effectively universal, while card acceptance is high and rising but not guaranteed. Banco de España's third study of cash-use habits, carried out by Ipsos on 5,022 interviews with the general population and 1,605 with small retailers and hospitality businesses, reports that every surveyed establishment accepts cash, while acceptance of cards and mobile devices is increasing (Banco de España, Estudio sobre hábitos en el uso del efectivo, Informe Ejecutivo 2024, published September 2024, checked 15 September 2026).
The same report gives the split you will actually meet at the till. In 40 per cent of establishments most payments were made by card and in 37 per cent by cash, and electronic means are accepted in a smaller share of municipalities that have no stable bank branch. Across the population, 30 per cent name a card as their main means of payment for shop purchases and 11 per cent a mobile device, with cash still the most-used instrument overall.
One scope caveat matters. The survey is national and focuses on small shops and hospitality, so it understates how card-led a central Madrid restaurant is likely to be, and it predates your trip by two years.
We looked for a Spanish law obliging a merchant to offer card payment and did not find one in the obvious place. Ley 18/2022, the business creation and growth act that pushed electronic invoicing across Spanish commerce, contains no requirement that a shop accept a card (BOE, Ley 18/2022, consolidated text, checked 15 September 2026). Treat a cash-only bar as annoying rather than as something you can escalate.
The conversion offer at tills and ATMs
Dynamic currency conversion is the moment a Spanish terminal offers to charge your card in your own currency rather than in euros, and it is almost always the worse of the two options. The conversion is performed by the party operating the cash machine or point of sale, not by your bank, and that party sets the rate and keeps the margin. Choosing euros hands the conversion back to your own card issuer.
European law does not ban the offer, but it does force the numbers into the open. Article 3a of Regulation (EC) No 924/2009, as amended, requires the party providing a currency conversion service at a cash machine or point of sale to express the total conversion charges as a percentage markup over the latest available euro reference rates published by the European Central Bank, and to disclose that markup to you before the transaction starts (EUR-Lex, consolidated Regulation (EC) No 924/2009, Article 3a, consolidated to 19 April 2021, checked 15 September 2026). The amending act that introduced it is Regulation (EU) 2019/518 (checked 15 September 2026).
Three further disclosures are mandatory at the machine or terminal under the same article: the amount payable to the payee in the payee's currency, the amount payable by you in your account currency, and the markup itself, displayed clearly and free of charge. That gives you a simple test. If a screen shows you two amounts, the euro one is the figure your own bank should be converting.
Reading a Spanish ATM screen
A Spanish cash machine has to tell you what it will charge before it dispenses anything. Banco de España's consumer portal states that when you withdraw cash, the bank must inform you whether it is going to charge a commission and must give you the chance to abandon the operation (Banco de España, Portal del Cliente Bancario, Cajeros, checked 15 September 2026). The same page notes that commissions vary according to whether the machine belongs to the bank that issued your card or to a different institution.
The vocabulary below is ordinary Spanish rather than any one manufacturer's wording, so read the screen rather than tapping in the position you expect the button to be.
| Spanish on screen | What it means | What to do |
|---|---|---|
| Importe / cantidad | The amount | Check it is in EUR |
| Tipo de cambio | Exchange rate | A rate here means conversion is being offered |
| Comisión | Fee charged for the operation | Note it, then decide whether to cancel |
| Sin conversión / en euros | Without conversion, in euros | This is normally the option you want |
| Continuar / Aceptar | Continue, accept | Only after you have read both amounts |
| Cancelar / Anular | Cancel | Available at the fee screen by law |
Banco de España's 2024 study found that most people withdrawing cash were not asked for a commission at all, and that of those who were, more than half accepted it and completed the withdrawal. That is the reflex the disclosure rule exists to interrupt.
Tipping and the printed price
Prices on goods in Spanish shops are final prices with tax already inside them. Real Decreto 3423/2000 defines the selling price as the final price of a unit of the product including value added tax and all other taxes, and requires it to be unambiguous, easily legible and visible without the consumer having to ask for it (BOE, Real Decreto 3423/2000, consolidated text, checked 15 September 2026).
That decree has a limit worth knowing. It excludes products supplied in the course of the provision of a service, so a restaurant's menu price is governed by other consumer rules rather than by this text. In practice Spanish menu prices are quoted tax-inclusive too, but this particular decree is not the authority for that.
The practical consequence is that the figure on the label is the figure you should be charged. If a bill carries a line you cannot identify, ask before you tap: reversing a card payment afterwards is much harder than querying it at the table.
What this guide does not cover
Everyday consumer payments in Madrid, and the Spanish and EU rules behind them, are the scope of this guide, and several adjacent things sit outside it. The guide does not cover the declaration duties that apply when you carry large sums of cash into or out of Spain, which sit in anti-money-laundering law rather than in the cash payment limit above.
It also cannot give you your own bank's charges. Whether your issuer adds a foreign transaction fee to a euro purchase, and what it takes for a withdrawal abroad, is set in your card contract and nowhere on a Spanish page.
Nor does it cover VAT refunds on shopping, which run through a separate customs procedure at the airport, or the fare payment systems on Madrid's metro and buses, which have their own ticketing rules.
Before you tap in Madrid
Set two defaults before your first purchase in Madrid. When any terminal or cash machine offers you a choice of currency, choose euros; when any machine shows you a commission, read it and use the cancel option if it is out of proportion to the amount you are withdrawing.
Keep a modest amount of cash for the places where a card is still awkward, and keep your card receipts until your statement clears, so you can match the euro amount on the slip against what your bank actually converted. If a business in the Madrid region charges you something you did not agree to, the Comunidad de Madrid runs a consumer complaint service with an online reclamación channel and a 012 telephone line, and separately handles hojas de reclamaciones for tourism businesses such as hotels, restaurants and travel agencies (Comunidad de Madrid, Reclamaciones, checked 15 September 2026).