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Shops could become cash machines under new government plans

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
LONDON,UNITED KINGDOM - SEPTEMBER 16:  Close up of British Currency on September 16,2020 in London,England. (Photo by Peter Dazeley/Getty Images)
The Treasury said it was looking at new rules to allow shops to dispense cash. Photo: Peter Dazeley/Getty Images

Brits could soon get cash back at shops without having to buy anything under new proposals being considered by the government.

The Treasury on Thursday said it was looking at new rules to allow shops to dispense cash in a bid to ensure everyone across the country can continue to access physical money.

Cash use is declining in the UK as people move towards card payments and digital payments on phones and apps. ATMs across the UK are becoming increasingly unaffordable to the companies that run them as a result. The Access to Cash review warned earlier this year that Britain’s cash distribution network could collapse without urgent intervention by the government.

READ MORE: 1p and 2ps saved as government vows to protect cash

Former chancellor Philip Hammond vowed to protect cash last year and the government said in March it would put in place legislation to underpin this promise.

The proposals announced on Thursday are the first steps towards meeting this pledge. As well as allowing shops to offer cash back without purchase, the Treasury wants to hand responsibility for overseeing the cash network to the Financial Conduct Authority (FCA).

“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,” John Glen, economic secretary to the Treasury, said in a statement.

“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.”

READ MORE: UK cash system is 'at risk of collapse'

At the moment, major retailers like supermarkets are the second biggest source of cash in the UK behind ATMs. Brits withdrew £3.8bn ($4.9bn) while at the tills last year.

However, the law states that people have to buy something in order to get cash back. The Treasury said EU rules currently make offering cash back without a purchase difficult but it hopes to change this when Britain exits the Brexit transition period at the end of this year.

While cash usage is declining, around 8 million people across the UK still rely on notes and coins for the majority of their day-to-day needs. Cash remains popular among the elderly, poor, and in rural communities.

READ MORE: 'Dramatic collapse' of cash in UK could exclude millions of elderly, poor and rural people

The Treasury will hold a six week consultation on its new proposals before deciding whether to pursue them.

WATCH: Why tax rises may be inevitable in Britain