In the wake of fierce criticism from politicians and consumer groups over the disappearance of ATMs and bank branches from the high street, Lloyds Banking Group is to run a pilot scheme which will offer retailers a fee for processing cashback transactions over the counter.
Currently business owners do not receive a fee when providing cashback to their customers. Lloyds says the reward scheme will offer more support to retailers and increase the number of places where people can withdraw their money.
Last week, the UK's Treasury Committee called for urgent action to prevent the collapse of access to cash. The Committee's intervention followed a report by consumer group Which? calling for the appointment of a new regulatory body to guarantee continued provision of cash to disenfranchised communities.
Lloyds says the cashback incentive will target areas of the UK where access to cash has been identified as being more difficult, such as rural or less-affluent areas which often rely on a very small number of ATMs.
Vim Maru, group director retail, Lloyds Banking Group says: “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."
It is estimated that there are more than 50,000 merchants in the target areas who may be eligible to participate in the cashback scheme. Initially customers will still be required to make a purchase in line with current cashback rules. The intention is that retailers will soon be able to offer cashback without the need for a purchase.
"The unlocked potential of cashback is obvious, as there are literally tens of thousands of local shops up and down our high streets that already have all the infrastructure in place to offer this service," says Maru. "We need to make it more viable for them to offer cashback to all customers, whether making a purchase or not.