You are here: Home - Saving & Banking - News -

Mastercard incentivising retailers to offer cashback

0
Written by: Emma Lunn
12/09/2019
Mastercard is rolling out a new cashback service amid concern about ATMs and bank branches disappearing from the high street.

The card issuer has introduced a new scheme which will encourage retailers to offer cashback when a customer pays using a Mastercard debit or credit card.

From 2020, shops and businesses in the UK will earn £0.12, and those in Ireland €0.13, each time they process a cashback transaction where the customer pays by Mastercard.

Although cashback at shops has been a cash withdrawal option for bank account holders for some time, the new income stream for retailers will provide further incentive for more businesses to offer the service.

Figures from UK Finance show  a drop in the use of cash of 16 per cent between 2017 and 2018, prompting Mastercard to warn that if action isn’t taken, access to cash could become more challenging in the future.

Making a purchase with cashback is typically associated with debit cards, and Mastercard is growing its debit card presence in the UK with new and challenger banks.

All its debit card issuing partners will take part in the new cashback initiative, including the following banks: Clydesdale Bank, Metro Bank, Monzo, N26, Starling Bank, Virgin Money, Yorkshire Bank and, later this year, Santander.

Mark Barnett, president of Mastercard in the UK, Ireland, Nordics and Baltics, said: “As an industry we have committed to finding sustainable ways to maintain people’s access to cash. By leading this new cashback initiative we aim to encourage more shops to offer their customers the option of cashback at the point of sale.

“This enhancement to retailer cashback isn’t a replacement for ATMs, but if we can add to the number of outlets where people can access cash, especially in areas without an ATM, it will be a valuable addition to the community for both consumers and local businesses.”

Figures suggest cashback from retailers is mainly used by consumers for top-ups. According to UK Finance, the average cashback with a purchase is £25, whereas a typical ATM withdrawal is £72.

Gareth Shaw, head of money at Which?, said: “Action to help the many consumers who have been stripped of access to cash is long overdue, but we need to see much more detail about how schemes like this will work in practice.

“While a step in the right direction, cashback can only plug some of the gaps in Britain’s broken cash infrastructure, which is why the government must introduce legislation that guarantees consumers can continue to access cash for as long as it is needed.”

Last month, Link pledged to protect free ATMs on every high street in the UK.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Cruisers urged to check travel insurance is shipshape

Holidaymakers embarking on a cruise need to check they are covered for all eventualities.

Close