Isaac R. asks: When people buy expensive art worth hundreds of millions of dollars, how do they pay for it? Like could they pay with cash or do they have to have their bank wire the money? Just wondering about the nuts and bolts here.

As we’ve discussed before, there are a handful of people walking around right now with a hyper-exclusive jet-black American Express credit card in their wallets that they could theoretically use to buy anything currently for sale, regardless of its cost. In fact, the current record we could find charged on such a credit card is $170 million charged by Chinese billionaire, Liu Yiqian, who no doubt is the world record holder for those sweet, sweet flight mileage points. But let’s imagine for a moment that a super-rich person didn’t have such a card or for whatever reason wanted to buy something worth millions of dollars not with a credit card, but cash. Could they? Well, surprisingly, in many countries no, with some exceptions. So let’s now talk about how the uber-wealthy actually go about paying for things worth millions upon millions of dollars.

To begin with, for the most part, paying for something worth a pile of Ferraris is the same as paying for any other item, with the fancy auction houses and stores we researched all offering the same basic payment options as stores for us peons. For example, Sotheby’s auction houses notes that customers can pay for any items they purchase “by bank transfer, cheque or cash (subject to any restrictions and legal limits)” while famed luxury superstore Harrods notes that you can pay for any item they have for sale with PayPal if you really wanted to.

As for how the immeasurably wealthy actually end up paying for such items, most of the time they just put it on their card.

What about transaction limits, you say?

As you can probably imagine, the credit cards used by millionaires and billionaires are different to the ones doled out to us mere mortals and come with a host of additional benefits to ensure the holder doesn’t up and take all of their money elsewhere.

Although the existence of these cards isn’t exactly a secret, banks that issue them don’t usually allow customers to apply for them, instead in most cases invite particularly wealthy customers to use them. While the most famous of these cards is arguably the Black American Express card alluded to at the start of this piece, there are a number of similar credit cards out there that fulfill essentially the same function, in that they allow the holder to buy any item they wish regardless of its value and provide a ridiculous number of services that come for free with simply having the card at all, including what almost amounts to something of a personal assistant in some sense, or at least someone who can figure out how to make whatever you want to happen, happen. This might be something as simple as tracking down tickets to a sold out show and acquiring them, to more outlandish requests.

If your imagination isn’t all that great, according to one executive at Amex asked about the more bizarre requests the company has fulfilled on behalf of customers holding their Centurion card, he noted they had a card holder once call up and ask for a handful of sand from the Dead Sea be delivered to their address in London. The company handled it from there, sending an international courier to the shores of the Dead Sea on a motorcycle. The courier then posted the sand to the customer. Apparently the sand was to be used in a school project for the customer’s kid.

In another case, the cardholder wanted to appear on a soap opera, but wasn’t sure how to make this happen. The Amex representative managed to get the woman an audition for a role in such a show.

Yet another bizarre request was from someone wanting Amex to find the horse ridden by Kevin Costner in Dances with Wolves. They were not only able to track this down for the customer, free of charge for this sort of service, but were also able to arrange for purchase of the animal and then had it transported to Europe where the customer lived.

In any event, contrary to popular opinion, these cards do often have a maximum limit, it’s just that this limit is informed by the holder’s personal wealth and the relationship they have with their respective bank. So in the case of billionaires and the like, since any theoretical limit put in place would exceed the value of almost any item available for purchase on Earth, it’s easier to just say the card has no limit, even though the bank would almost certainly query such an individual trying to charge a billion dollars to their card unless they got pre-approval for the transaction.

In the event a billionaire, for whatever reason, decided that they instead wanted to pay for something worth millions of dollars out of pocket rather than putting it on a credit card, they could just as easily also pay using a debit card or a personal check. As with credit cards, there’s no set limit to the amount of money an individual could spend in this manner on a single transaction. There would just be similar caveats to the credit card payment method of certain transactions likely to be double checked if they were truly outlandish and out of the ordinary for a given account holder. And, of course, in these cases the one added caveat of the money needing to be in their account at the time, unlike a credit card purchase.

On that note, for anyone curious, the largest known personal check ever written was for $974,790,317.77 in 2014 by one Harold Hamm to pay his ex-wife a court mandated settlement after a divorce. Amazingly, Hamm’s ex-wife originally refused to cash the check, feeling the amount was too small given Hamm’s then net worth of $18 billion. However, she abruptly changed her mind the next day and cashed it anyway. According to Forbes, the process of cashing the check went ahead mostly like any other, with the exception of the bank calling Hamm to make sure the check was genuine before depositing the money into his ex-wife’s account.

The largest known business check on the other hand was written in 2008 by the Mitsubishi Financial Group to basically bail out Morgan Stanley during the 2008 financial crisis. The total amount? A cool $9 billion. It’s noted that ordinarily such a massive amount of money would have been sent via a wire transfer but because the day the money was needed was Columbus Day (a day banks are closed) Mitsubishi decided to just cut Morgan Stanley a check instead of waiting for the banks to reopen.

You’ll note in all of this that we’ve not yet dealt with the issue of paying cash. Interestingly, even though a billionaire could pay for a $100 million yacht with a personal check or use a debit or certain credit cards, as alluded to previously, they generally couldn’t pay with cash.

Why?

Well, to put it simply, nobody would accept it and even the payer probably wouldn’t want to pay this way either as there are a surprising number of very serious laws that are easy to unknowingly break when talking about handling large sums of cash.

While, for example, U.S. law dictates that any debt (regardless of size) that the debtor attempts to settle with cold hard cash cannot be refused (U.S. Code Title 31 §5103), when looking at buying something directly, it would seem no such guarantee to be able to use cash is available, and this seems to be true in many nations the world over.

Beyond this, although most banks we researched note that there’s generally “no limit” to the amount of money a customer can theoretically withdraw from their account at once, in practise actually walking into a bank and attempting to withdraw a million dollars, even if you can easily afford it, is a bit of a process. For starters, many banks simply don’t have all that much cash held in reserve at any one time, so a request to withdraw such a large amount quite literally couldn’t be physically honored in many cases.

For this reason, most banks the world over ask that customers wanting to withdraw large amounts of cash should call several days ahead so that accommodations can be made.

If a customer does call ahead to their bank with a request to withdraw an especially large amount of money, providing they have the money in their account and can prove who they are over the phone, there really shouldn’t be any issues in getting money within a reasonable time frame, though understandably the more money you request, the longer it will take to be delivered either to the bank or your home. Further, most who do this should expect to have the bank look into what they’re planning on using the cash for to make sure the customer is not being scammed.

For the super wealthy, however, they’re likely to face much less scrutiny on that front, especially if withdrawing such large sums is a frequent thing for them. For example, a man known to do exactly this is boxer Floyd Mayweather, who revealed in an interview that he periodically has millions of dollars in cash delivered to his home by his bank, largely just because he can. In keeping with his nickname “Money”, Mayweather has been known to, at least in a few instances, walk around with more than a million dollars in cash on his person and, seemingly in desperate need of a financial advisor he’ll actually listen to, was once observed flashing a bank receipt showing that he had over $100 million, in his checking account.

On the less flashy and more humble side of carrying a lot of cash, keeping with his overall “cool guy” persona, in 2013 George Clooney gathered up 14 of his closest friends and presented each one of them with a briefcase containing exactly $1 million in cash. The star explained to his stunned friends that the money was a gift to thank them for their support when he was just a struggling actor, reportedly stating:

Listen, I want you guys to know how much you’ve meant to me, and how much you mean to me in my life. I came to L.A., I slept on your couch. I’m so fortunate in my life to have all of you, and I couldn’t be where I am today without all of you. So, it was really important to me that, while we’re still all here together, that I give back… I know we’ve all been through some hard times, some of you are still going through it… You don’t have to worry about your kids; you don’t have to worry about school; you don’t have to worry about paying your mortgage.

Going back to somewhat more non-charitable examples, Mayweather is by no means an outlier in this regard and numerous celebrities and millionaires who apparently don’t understand inflation and the power of compounding interest have been observed withdrawing obscene amounts of money from their checking accounts either to show off or make it rain especially hard that day. And don’t even get us started on Nicholas Cage…

Something they generally don’t do, however, is spend all that money at once in a single place because a lot of businesses won’t accept that much cash in one transaction. Along with the obvious issues of security and practicality when it comes to accepting payment for something worth millions of dollars in cash, especially large cash deposits often come with a lot of additional scrutiny from both banks and the respective government of the country you’re making them in.

In the UK, for example, under current UK Money Laundering Regulations any business or sole trader that accepts cash payments in excess of £10,000 has to register as a “high value dealer” with HMRC and accepting a cash payment of this magnitude without doing so carries heavy penalties. Business and individuals who are “only ever paid large amounts by credit card, debit card or cheque” on the other hand aren’t required to do this and as a result, many UK businesses will simply not accept cash payments in excess of this amount.

Likewise, in the United States, banks are required by law to report individual cash transactions of $10,000 or more to the IRS under the Bank Secrecy Act of 1970. Additionally under current US tax law, all individuals and most (but not all) American businesses are required to report any individual cash payments of $10,000 or more to the IRS, even if the money isn’t deposited into a bank account.

As in the UK, most businesses don’t want this kind of hassle so tend to avoid accepting payments in excess of this amount. And failure to follow the rules on this sort of thing comes with both heavy fines and, for individuals, even potential jail time.

It is noteworthy that the relatively small amount of $10,000 as the trigger point has been something widely railed against in recent years given this figure has not been adjusted for inflation since the law was established in 1970. For your reference, $10,000 in 1970 would be about $65,000 today.

Curiously, one of the few places we found that doesn’t specifically seem to limit the amount a customer can pay at once with cash are auction houses. That said, as you may have noticed when we listed the payment methods accepted by Sotheby’s earlier, the auction house has a disclaimer about cash payments, noting that all such payments are “subject to any restrictions and legal limits”.

The auction house isn’t exactly forthcoming with what exactly these supposed “legal limits” are and it’s noted in the book Money Laundering Through Art: A Criminal Justice Perspective that the auction house has never really made it clear how much cash they’re willing to accept at once for a piece they sell. The same is true of Christie’s who don’t even make mention of a limit on cash payments on any official documentation they’ve ever released.

This is largely because auction houses in the US are under “no specific obligation to report any suspicious operations” to the authorities, unlike many other institutions that handle large sums of money. Because of this, an auction house is likely the only place, at least in the United States, where you could conceivably pay for something worth millions of dollars in cash and not have it be that big of a big deal.

It’s worth noting that your bank would still report the withdrawal of the cash to pay the auction house to the IRS who in turn would probably be very curious about where exactly the money went come tax season. Thus, the insanely wealthy person could very much expect to get a call about what they were doing with those funds, or at least their accountant would likely get such a call.

Unsurprisingly from all this, while it’s technically possible to pay for something worth millions of dollars at an auction house with cash, in relatively recent history with so many other more convenient ways to pay, we were unable to find any evidence of such a transaction ever taking place, though presumably Floyd Mayweather has had some whopper of cash payments for things over the years, unless he’s just re-depositing that cash he withdraws after he’s gotten sufficient “showing off” mileage out of it.

Either way, given the truly shocking number of laws there are concerning large cash transactions, opening one’s self up for scrutiny from the IRS is something even the obscenely wealthy don’t enjoy. Those guys got Al Capone- they can get anyone.

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