Shoppers to be able to get cashback without buying anything under new proposals
Consumers would be able to get cashback from shops without making a purchase under new Government proposals, which are designed to protect access to cash.
Last year, about £3.8 billion of cashback was received by shoppers who were making purchases at a till, meaning it was the second most common way to get cash in the UK, behind withdrawing from cash machines.
But at the moment it's difficult for shops to offer cashback to consumers who aren't buying anything, which the Government says is due to EU laws around payment services.
The Government is proposing scrapping these rules at the end of the Brexit transition period on 31 December 2020. It says this would mean consumers would be able to get cashback from shops of all sizes, without making a purchase.
The announcement comes as part of new proposals to protect access to cash in the UK, which also include giving the Financial Conduct Authority the responsibility for maintaining cash systems (at the moment, responsibilities are split between different organisations, including the Bank of England and the Treasury). The Government is now holding a six-week call for evidence, where interested parties will be able to have their say on the proposals.
While many people rely on their debit or credit cards, or mobile wallets, to pay – and this has become much more prevalent in recent months due to coronavirus – many others, including those who are elderly or vulnerable, continue to rely on cash. The Government's proposals are designed to protect access to cash for those who want to continue to use it.
What does the Government say?
John Glen, Economic Secretary to the Treasury, said: "We know that cash is still really important for consumers and businesses – that's why we promised to legislate to protect access for everyone who needs it.
"We want to harness the same creative thinking that has driven innovation in digital payments to maintain the UK's cash system and make sure people can easily access cash in their local area."