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Mastercard has outlined a new initiative to increase the UK’s access to cash. Local shops and businesses who choose to offer cashback in conjunction with a purchase, will from April 2020 earn a fee every time they dispense cash to a shopper paying with a Mastercard debit card.
Mastercard to offer retailers fee incentive to boost cashback in the UK
Although cashback at shops has been a cash withdrawal option for bank account holders for some time, by providing retailers with this newly introduced fee, it will offer a new income stream to the high street and provide further incentive for local shops to offer the service.
Access to cash is becoming more challenging as its usage is rapidly declining in the UK. UK Finance’s own figures show a drop of 16% between 2017 and 2018. Mastercard and its banking partners understand the need to find new and sustainable ways to offer access to those customers who continue to prefer it as a payment option.
Purchase with cash back is typically associated with debit cards and Mastercard is growing its debit card presence in the UK with new and challenger banks. All debit card issuing partners will take part in the new initiative, including the following banks: Clydesdale Bank, Metro Bank, Monzo, N26, Starling Bank, Virgin Money, Yorkshire Bank and starting later this year Santander.
“As an industry we have committed to finding sustainable ways to maintain people’s access to cash. By leading this new cash back initiative we aim to encourage more shops to offer their customers the option of cashback at the point of sale,” says Mark Barnett, President of Mastercard in the UK, Ireland, Nordics and Baltics.
“This enhancement to retailer cash back isn’t a replacement for ATMs, but if we can add to the number of outlets where people can access cash, especially in areas without an ATM, it will be a valuable addition to the community for both consumers and local businesses.”
Cash back at shops provides an important additional means to withdraw cash, consumers often make use if it for top ups to their personal cash holding and the typical withdraw reflects this. According to UK Finance, the average cash back with a purchase size is £25, where as a typical ATM withdraw is now £72.
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