Mastercard aims to boost access to cash in the UK with new retailer cashback initiative

Today Mastercard announces the introduction of a new initiative to increase the nation’s access to cash. By leveraging our technology, 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.

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.

Without action today, access to cash could become more challenging in future as cash usage is rapidly declining in the UK. UK Finance’s own figures show a drop of 16% between 2017 and 2018. Mastercard and our banking partners understand the need to find new and sustainable ways to offer cash 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 our debit card issuing partners will take part in this new cash back initiative, including the following banks: Clydesdale Bank, 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: “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 cash back at the point of sale.”

Mark Barnett continued: “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.”

Natalie Ceeney, Chair of the Access to Cash review said: “This is a very positive and welcome initiative from Mastercard. Supporting local shops to offer cash back will help maintain access to cash, and benefit retailers and consumers alike. I’m delighted that Mastercard have taken this step.”

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.

For shops and businesses who already offer purchase with cash back, they don’t need to do anything, Mastercard will work with their payment acquirer to collect the new fee on their behalf. For those businesses that currently don’t offer cash back, but would now like to, they should contact their payment acceptance provider.

Although this initiative is for Debit Mastercard cardholders in the UK and Ireland, over time it is expected to be made available in other markets also.

New Mastercard retailer purchase with cash back FAQs:

  1. What is the value of the new fee for shops and businesses?

A fee of 12p will flow to the payment acquirer of the shop dispensing cash for each purchase with cash back transaction. In Ireland the fee will be €0.13.

  1. Can card holders access cash back without making a purchase?

This enhanced cashback proposition for shops is designed to mirror the existing service so a purchase will need to be made in conjunction with the cashback. This will continue to encourage shops to adopt the service and offer them revenue beyond just the cashback fee. It is not designed as a replacement to ATM withdrawals.

  1. Is there a cost to the cardholder to receive purchase with cash back?

As with the existing cash back facility at shops, there is no charge to cardholders.

  1. Does this change apply to debit cards on other payment networks?

Today’s announcement only applies to Debit Mastercard purchase with cash back transactions in the UK and Ireland.

Author: Yash Hirani

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