Cash-intensive business — a named higher-risk factor
“Cash-intensive business” is not an internal risk label a firm invents — it is written into EU law as a higher-risk factor. Annex III to Regulation (EU) 2024/1624 lists “businesses that are cash-intensive” among the customer risk factors that Article 20 requires firms to take into account. That gives the category a specific status: it is a factor you must consider, from a list the Regulation says is non-exhaustive, meaning it is a floor rather than a checklist.
1. Where it sits in Annex III
It appears alongside customer risk factors that frequently travel with it, and reading them together is more useful than reading the cash limb alone:
| Annex III factor | Why it compounds |
|---|---|
| (1)(e) businesses that are cash-intensive | The base factor |
| (1)(a) the relationship or transaction is conducted in unusual circumstances | Cash volumes inconsistent with the stated trade |
| (1)(f) ownership structure appears unusual or excessively complex given the nature of the business | A small cash trade with a layered holding structure |
| (1)(h) entity created in a jurisdiction where it has no real economic activity or apparent economic rationale | Structure without substance behind the cash |
| (2)(c) payment received from unknown or unassociated third parties | Deposits that do not match the customer base |
2. The EUR 10 000 cash payment limit
Article 80 of the Regulation sets a Union-wide ceiling: persons trading in goods or providing services may accept or make a payment in cash only up to EUR 10 000, or the equivalent in national or foreign currency, whether the transaction is carried out in a single operation or in several operations which appear to be linked.
Three qualifications matter in practice:
- Member States may go lower. They may adopt lower limits after consulting the European Central Bank, and must notify the Commission within three months. Existing lower national limits continue to apply, and were to be notified to the Commission by 10 October 2024.
- Linked operations count together. The limit is not per receipt. Structuring a single commercial transaction across several payments does not reset it.
- There is a carve-out that reads oddly at first. The limit does not apply to payments between natural persons not acting in a professional capacity, nor to payments or deposits made at the premises of credit institutions, electronic money issuers and payment service providers.
That second carve-out is the one payments firms should read carefully. It removes the Article 80 ceiling from deposits at your premises — it does not remove customer due diligence, monitoring, or the Annex III risk factor. If anything it concentrates the analytical burden on the firm, because the transaction-level backstop that applies to a merchant does not apply here.
3. What “inconsistent” actually looks like
Facts: a customer operates a single small food outlet and banks daily cash takings averaging a level consistent with that trade. Over a quarter, deposits treble while card acquiring volume through the same business is flat.
What the rule engages: Annex III factor (1)(e) is already present and unremarkable. What changes the picture is the divergence between the two payment channels for the same business — cash rising while card, which reflects the same customer footfall, does not. That is the “unusual circumstances” limb, and it engages the Article 34(2) examination duty for transactions conducted in an unusual pattern.
What the analyst does: examines the origin and destination of the funds and the purpose, rather than escalating on volume alone. The comparison that carries the analysis is internal — cash against card for the same merchant, over time — because it controls for the trade type without needing an external benchmark.
FAQ
Is a cash-intensive customer automatically high risk?
No. Annex III lists factors to be taken into account, not classifications to be applied. Cash intensity is expected in many legitimate trades; the risk arises from inconsistency with what else is known.
Does the EUR 10 000 limit apply to deposits at our branch?
Article 80(4) disapplies the limit to payments or deposits made at the premises of credit institutions, electronic money issuers and payment service providers. The due diligence and monitoring obligations are unaffected.
Can a member state set a lower limit?
Yes, after consulting the European Central Bank and notifying the Commission within three months. Lower limits already in force at national level continue to apply.
Related: Structuring and smurfing · Enhanced due diligence · Italy’s objective cash communications
