Cashback plan for shops as the banks disappear
SHOPKEEPERS ARE set to be offered financial incentives to provide a cashback service for customers in communities hit by bank and ATM closures.
The payment scheme for retailers is being piloted by Lloyds Banking Group and Visa amid concern that residents in rural and less affluent areas are finding it increasingly hard to access their cash.
Lloyds said it hoped the initiative would lead to a rise in the number of places where people are able to withdraw money. It is also hoped the cashback service will give consumers another reason to visit local stores at a time when the high street is facing huge competition from online shopping.
Lloyds Banking Group’s Vim Maru said: “Our new cashback pilot, in partnership with Visa, aims to increase the number of places where people can withdraw their money, particularly in those areas which are currently under-served by free-to-use ATMs where a customer’s access to cash may be more vulnerable.”
Thousands of high street stores currently have cashback infrastructure in place but many do not see it as a viable option as, until now, they have not received a fee for the transactions.
The fee that will be paid to retailers under the new scheme will be set “in due course”, Lloyds said yesterday. It also pledged that the service would be made available to all bank users, not just those with a Lloyds account. The scheme will initially only be rolled out to a small number CONSUMER GROUP Which? has warned that ATMs and banks in the UK are closing at an “alarming” speed.
Figures show that cashpoints disappeared at a rate of 488 per month between June and December last year.
Around 3,300 bank branches have also closed their doors since 2015, prompting fears that the UK is drifting towards becoming a cashless society.
Which? has called for “urgent regulatory action” to protect cash as a payment method.
ATM network Link recently said operators are to be given “super premiums” to help keep cash machines open in remote areas.
of stores, but it is estimated that more than 50,000 retailers could eventually participate.
And although shoppers will at first need to make a purchase to get cashback, in the long run it is hoped the service will be offered irrespective of whether a person has bought something.
Mike Cherry, national chairman of the Federation of Small Businesses, said: “Small business owners should not be expected to provide cashback for free given the strain it puts on them. It’s good to see this oversight starting to be addressed. However, security will immediately spring to mind as a concern for a lot of small business owners when they see this proposal.”