Why incentivise the availability of cash?
January 22,2020 08:06 AM GMT
Today we announced the launch of an industry-wide scheme with our partner banks to incentivise retailers to offer cashback in areas of the UK where the availability of cash is limited, such as the most remote and rural locations. Why has a digital payments company chosen to launch an initiative encouraging access to cash though? It might not seem immediately obvious but there are some very good reasons why we have introduced the scheme.
As digital payments continue to surge in popularity in the UK, financial inclusion has become a hot topic. Of particular concern is that vulnerable consumers who have traditionally relied on cash, such as the elderly, are at risk of becoming financially excluded as access to cash reduces. In this context, it is vital that these individuals are not left behind.
Although we do not have all the answers, we believe that Visa’s global network and services are a powerful platform to advance financial inclusion. What’s more, we recognise the part we can play in working with governments and other organisations to ensure nobody is left behind by the transition towards the greater use of digital payments.
We know that digital payments can offer benefits for all stakeholders. For consumers, these include protection from fraud, time efficiency, avoided late payments and the ability to track and manage expenditure. Additionally, we have seen around the world how digital payments, whether on a mobile phone, prepaid or debit card, can be an effective gateway to the formal financial system for households and businesses who would otherwise have been excluded.
Yet there is still some way to go in making the benefits of digitalisation universally available. A digital economy that works for all depends on everyone having the skills and tools they need to participate. This is a matter of both empowering consumers and businesses, and of responsible players across every sector playing their part in making the transition to digital seamless and accessible to all.
This is why solutions such as our new cashback scheme are so important. The scheme grew out of an innovative pilot with our client Lloyds Banking Group early last year, and was underpinned by the realisation that most retailers already have the infrastructure in place to offer cashback but many currently do not. Under our new scheme, retailers in target areas will receive an incentive for offering cashback, increasing the number of places where cash can be accessed.
Ultimately it may be the case that many people choose to stop using cash altogether and instead make the majority of their payments using digital methods, but for as long as there is a demand for cash our industry needs to work collaboratively to ensure that those who wish to use cash are able to.
As the world of payments changes, we believe that digital payments technology can play an important part in delivering greater financial inclusion. This is why we are actively working with our clients to find the innovative solutions that will create a digitally inclusive society where consumers and merchants are able to pay and be paid in whichever way they choose.