People can withdraw money from their bank accounts for free at the cash registers without making a purchase, as suggested by the UK government to help to back up the future of cash.
Retailer cashback is the second most widely used method of withdrawing cash in the UK after ATMs. Consumers withdrew £ 3.8 billion in cash last year when paying for their purchases at a cash register.
The Treasury Department said EU law has made it difficult for retailers to offer cashback without buying, and it has tried to get rid of those rules after the Brexit transition period expired on December 31.
Concerns about access to cash have increased, as have banks closed branches But vulnerable people or people in remote areas have difficulty introducing digital alternatives. Covid-19 has accelerated the move away from cash as the government encouraged the use of contactless payment terminals to reduce the spread of the virus and some retailers has stopped accepting cash.
Shopping on the Internet has also increased. Online card spending hit a record high of £ 21.8 billion in July. This is clear from numbers released by UK Finance on Friday. The surge suggested that “the pandemic has accelerated the ongoing shift towards consumers buying goods and services online”.
Cashback without purchase is to be tested this fall at nine locations in a pilot project involving Link, the ATM network and PayPoint. Natalie Ceeney, chairwoman of an independent Commission Access to cash last year said the need to keep cash viable was “increasingly urgent”.
“Last year we warned that Britain is sleeping in a cashless society. Covid-19 put even more strain on the entire system, ”she said.
The Treasury Department launched a six-week consultation on Thursday on ways to deposit and withdraw cash and improve cashback services. It is also weighed whether the Financial Conduct Authority should be given responsibility for maintaining the cash register system for private customers.
Gareth Shaw, head of money at consumer group Which? Said the consumer group is helping the FCA take responsibility for protecting cash “because the current oversight of the till system is fragmented and no one is held accountable”.
Access to cash is only half the problem, he suggested. “While legislation is critical to protecting access, it risks being undermined if people can’t spend money on the things they need. In its new role, the FCA should also address the issue of cash acceptance. “
Banks and building societies have closed or are about to close 3,770 branches since January 2015. This is based on research by Which? Outstanding.
According to Ceeney, even if a community has an ATM, it may be in an unsafe part of the city, may not always be functional, or not be connected to surrounding villages by a bus route. “We relied too much on the fact that” City X is fine because it has an ATM “or” that a group of people can get to a bank branch within 3 miles “”.
If local businesses can accept and dispense cash, the money will be spent in the local community rather than where the nearest ATM is. The government also said there was less need to move and distribute banknotes and coins through cash centers, which would reduce associated costs.
John Glen, Secretary of Commerce for the Treasury Department, said: “We want to use the same creative thinking that has driven innovation in digital payments to keep the UK till system running and ensure people in their area have easy access to cash.”