Changes to enable cashback without purchase in shops must be part of a wider strategy to make sure people are not cut off from cash, according to Which?

The consumer group welcomed changes in the House of Lords to the Financial Services Bill, which will mean corner shops, pubs and cafes will soon be able to offer cashback without people having to make a purchase first.

The UK’s cash infrastructure has come under greater strain during the coronavirus pandemic, with some shops refusing cash and further ATM and bank branch closures.

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The Government has previously said it will legislate to protect the future of cash. Industry initiatives have also been taking place to boost cash access.

Gareth Shaw, Which? head of money, said: “Cashback without purchase is a significant step forward and has the potential to make a big difference in communities that have seen their access to cash diminished by widespread closures of ATMs and bank branches.

“However, it is just one piece of the jigsaw. It must be part of a wider strategy that ensures people who depend on cash are not cut off from the money they need to pay for essentials.

“Legislation to protect access to cash is integral to this. The Government must set out when it will be introduced so the future of cash is secured for the millions of people who still need it.”

In October 2020, ATM network Link and PayPoint started a trial to allow consumers to withdraw cash using the Link network from retailers’ tills without paying a fee or making a purchase.

The trial is operating across 12 shops in four communities – Cambuslang (Scotland), Denny (Scotland), Hay-on-Wye (Wales) and Burslem (England).

Since launching, more than 12,000 cash withdrawals and 2,000 balance inquiries have been made with an average withdrawal size of around £29.

The trial forms part of the Community Access to Cash Pilots scheme.

Link said it will announce the next steps for a possible national rollout in due course.

John Howells, CEO of Link, said: “This is a very positive step and brings much needed innovation in access to cash. Link expects that free ATMs will continue to be the most popular method for withdrawing cash and will be a feature of high streets and supermarkets for years to come.

“However, as consumers continue to increase their use digital or card payments, we need alternatives where ATMs may not be viable.”

David Postings, chief executive of UK Finance, said: “Cashback without purchase will allow retailers to enable consumers to access cash at a time and place that is convenient for them and is a welcome development, particularly for those in rural communities.

“This new legislation will complement the industry’s existing work to maintain access to cash, including the recently launched Community Access to Cash Pilots.”