Mastercard has announced a new initiative to increase the nation’s access to cash, letting merchants earn a fee every time they dispense cash to a shopper paying with a Mastercard debit card from April 2020.
Although cashback at shops has been a withdrawal option for bank account holders for some time, by providing retailers with this fee, Mastercard suggested that it will offer a new income stream to the High Street and provide further incentive for local shops to offer the service.
A fee of 12p will flow to the payment acquirer of the shop dispensing cash for each purchase with cashback transaction. In Ireland the fee will be €0.13.
Recent UK Finance figures showed a drop of 16 per cent in cash usage between 2017 and 2018, with the average cashback with a purchase being £25, compared to typical ATM withdrawal now coming in at £72.
The Access to Cash review found that cash is only used for three in every 10 transactions, down from six in 10 a decade ago, and is forecast a fall to as low as one in 10 transactions within the next 15 years. This shift away from cash towards digital payments is placing significant strain on the UK’s cash infrastructure, which currently costs around £5 billion a year to run.
Natalie Ceeney, chair of the review, said: “Supporting local shops to offer cashback will help maintain access to cash, and benefit retailers and consumers alike, so I’m delighted that Mastercard have taken this step.”
Purchase with cashback is typically associated with debit cards and Mastercard is growing its debit card presence in the UK with Clydesdale, Metro Bank, Monzo, N26, Starling Bank, Virgin Money, Yorkshire Bank, and starting later this year, Santander.
Mark Barnett, president of Mastercard in the UK, Ireland, Nordics and Baltics, commented: “This enhancement to retailer cashback 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.”
Recent Stories