New proposals are being launched by the UK Government to protect cash spending systems in the UK after a sharp rise in digital payments.
Under the government proposals, customers will soon be able to get cashback without making a purchase from retailers of all sizes in local communities countrywide.
The plans are a bid to protect cash payments from dying out after an increased use in a contactless card, mobile phone, and e-wallet payments, as well as to protect those most vulnerable in the community, such as the elderly, who may still rely on the manual transactions to purchase items.
Many also still find cash is a more accessible option than digital payments methods or that it helps them to budget and manage their finances.
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”
At present, EU law makes it difficult for businesses to offer cashback when people are not paying for goods and has been a continuing barrier for shops to adopt it in the UK.
Westminster says it is now considering scrapping these rules once the transition period ends on 31 December 2020 and Britain leaves the European Union.
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The sharp rise in contactless and digital payments over the last six months is also likely to be related to the continuing coronavirus pandemic, with many turning away from using physical money for fear of spreading the virus.
It is also due to the increase in digital transformation across the UK, with many businesses and the public increasingly using technology to make and take payments.
According to the government, cashback has become the second most used method for withdrawing cash in the UK behind ATM machines. Consumers received a total of £3.8 billion of cashback last year when paying for items at a till.
However, the Bank of England says that debit cards “overtook cash as the most frequently used payment method in the UK in 2017.”
A recent report by Capgemini has suggested that global non-cash transactions increased by 14% in volume between 2018 and 2019 with 708.5 billion transactions – the highest growth rate in 10 years.