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The "Cashback Without Purchase" rollout will be extended to 2,000 retailers by end of the year, LINK has announced.
Following a year-long pilot, LINK’s cashback scheme is due to be rolled out across the UK.
Already live in more than 1,000 locations, the scheme means that consumers can make a cash withdrawal and check their balance for any amount up to £50 without needing to make a purchase or paying a fee.
Consumers using the service can also choose to withdraw any amount between 1p and £50 rather than being restricted to notes dispensed at ATMs.
It follows changes to the law in the Financial Services Act 2021, which facilitated cashback without purchase services through an amendment to the legislation that was added by Lord Holmes of Richmond.
It added a new exemption to the regulations that enables the provision of cash at corner shops, supermarkets, cafes, pubs and the like without a purchase.
“The cashback at the till service stands to make a real difference to local communities by providing access to cash for people that need it, and supporting cash acceptance by local businesses,” said treasury minister John Glen.
Protecting access to cash is absolutely vital for millions of people who depend on it, agreed Tracey Graham, who chairs the LINK Consumer Council. “Cashback Without Purchase is a convenient new way for people to withdraw notes and coins at their local retailer.”
“The Consumer Council is delighted to see this important service rolled out across the country and will continue to seek innovative ways to support people who rely on cash for as long as it is needed,” she continued.
The news has also been greeted by consumer groups in the UK.
“Everyone should have reasonable access to their own money without having to pay, so it’s good to see a cashback scheme rolled out to communities who rely on cash the most,” said Gareth Shaw, Which? head of money.
Although schemes such as Cashback Without Purchase have a role to play, they will not be enough on their own to plug the gaps in the UK’s fragile cash system, he warned. “That is why the government must urgently press ahead with legislation that guarantees consumers can continue to access cash for as long as it is needed.”
Others have also taken a more critical position on the news, pointing to the government to do more to guarantee cash.
"The main problem with the entire idea is that a cash transaction is always linked to a card transaction,” said Bob Lyddon, a payments consultant. “Cash does not circulate freely, being paid in and taken out again. Instead, it’s an adjunct to the card.”
Lyddon criticised the move as a “token gesture”.
“It is not really very exciting at all, but you can be sure it will be warmly welcomed by cash’s enemies, like John Glen,” he quipped.
Equipping 2,000 shops with this service does not begin to address the issue of guaranteeing access to cash for the foreseeable future, complained Ron Delnevo, a board member at the UK Cash Supply Alliance.
“The UK has lost 25 percent of our ATMs in recent years, around 18,000 machines, so 2000 shops with a cashback service is a drop in the ocean by comparison,” he said, continuing to point out that there is no long-term guarantee attached. “It can be stopped by the banks that fund LINK in a couple of years. This is not the long-term solution that is required for UK cash access.”
As part of the scheme, merchants are remunerated for providing this service by the cardholder’s bank via the LINK member offering the service.
The scheme was originally piloted in shops across Burslem in Staffordshire (England), Hay-on-Wye in Powys (Wales), Cambuslang in South Lanarkshire (Scotland) and Denny in Stirlingshire (Scotland).
The initiative originally formed part of the Community Access to Cash Pilots, a scheme that was led by Natalie Ceeney CBE, who had previously chaired the UK’s Financial Ombudsman and is a non-executive member of the board for fintech lobby group Innovate Finance.
During the year-long trial, more than 24,800 transactions have been made with an average withdrawal size of £27.81.
More than £680,000 has been taken out using the channel so far.
