The plan builds on a budget commitment from the Chancellor to protect the treasury system, as ATM numbers and bank branches continue to decline rapidly in the face of the challenge posed by digital payments and contactless cards.
The Treasury’s main proposal – which is the subject of a six-week consultation – is that retailers’ checkouts effectively become ATMs, and that customers would have no obligation to buy anything at the same time. time.
Buyers received £ 3.8bn in cashback last year, mostly via supermarkets, and it is hoped that more stores can offer the service in the future in an effort to keep cash flow and costs down distribution down at the same time.
However, the British Retail Consortium (BRC) has suggested that an industry – reeling from the effects of the coronavirus crisis – is unlikely to want to invest in the potentially expensive provision of liquidity.
Andrew Cregan, BRC Payment Policy Advisor, welcomed the scrutiny of the matter, but said: “The government and regulators should ensure that when reimbursement services are provided by retailers , appropriate mechanisms are in place to ensure that traders are compensated fairly.
“In addition, the government’s plans to allow cash back rewards in all stores would pose problems for retailers who would often have to hold significantly more cash than normal – putting them at increased risk of crime. ”
The government’s broader proposals include granting the Financial Conduct Authority (FCA) oversight of the retail cash system to protect small and medium-sized businesses in addition to its current obligations to consumers.
The city regulator fired a warning shot on banks over the summer, warning of further branch closures after use collapsed during the coronavirus lockdown, with customers being forced to stay at their home.
He highlighted data from the Which? this showed that 3,500 sites had been lost in five years.
The watchdog also expressed concerns about the plummeting number of free cash machines – with nearly 10,000 lost in two years. The BRC said it believed there were only 10,000 left.
FCA’s own proposals call for it to be notified in advance of any closures and for customers to be given at least three months’ notice to allow them to make other arrangements.
He cited this year’s Financial Lives survey, which found that one in ten people, many of whom were seniors, did not know how they would react in a cashless society.
John Glen, Economic Secretary to the Treasury, said: “We want to harness the same creative thinking that has led to innovation in digital payments to maintain the UK’s treasury system and make it easy for people to access to species in their region. ”
The Community Access to Cash Pilots (CACP) initiative is working on a number of pilot projects, including the use of No Purchase Cash Back, to test solutions to the cash flow crisis.
Link, which operates the UK’s largest network of ATMs, is among the organizations participating in the trials.
Its managing director, John Howells, said of the Treasury intervention: “The UK is not yet ready to go cashless and Link welcomes the government’s intention to legislate to support access. to cash ”.