Lloyds will pay a fee to retailers for processing cashback transactions
UK banking group to boost number of retailers offering cashback. Source: shutterstock.com
Lloyds Banking Group in partnership with Visa has announced a new pilot scheme designed to boost access to cash, which will see local retailers paid to offer cashback to customers in their stores.
Currently, business owners do not receive a fee when providing cashback to their customers. The new fee will offer more support to retailers and increase the number of places where people can withdraw their money.
This is not a substitute for ATMs or branches. The scheme is aimed at creating more availability where access to cash is challenging and customers will still have the choice to pay with their cards and mobile devices as they do today.
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.
It’s hoped that the initiative will also give customers more reasons to visit local shops at a time of unprecedented challenges for British high streets.
How the new cashback incentive scheme will work:
- Retailers will receive a fee to process cashback transactions. The value of this fee will be set in due course.
- 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.
- Merchants will also be supported to advertise the cashback service in their premises to increase customer awareness. Where appropriate, grants will be available to support shop owners e.g. if they need to improve access to their store, or gain access to card machines.
- The focus of the scheme will initially be on those areas where access to cash has been identified as more challenging. These areas have been chosen based on assessments carried out as part of LINK’s Protected ATM and Financial Inclusion programmes.
- The cashback fee will be available to suitable merchants in the target areas, such as local convenience stores and newsagents.
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