While the cashback programme at retail stores is gaining ground in Cyprus, kiosk owners refuse to participate in the scheme, claiming that it could endanger the viability of small businesses.
So far, about 15,000 such transactions have taken place in the first five months of the year, at a total value of €900,000, providing consumers access to cash when banks are removing ATMs.
The head of the New Cyprus Kiosk Association, Spyros Xinaris, told MPs on Tuesday that implementing the newly launched JCC service at kiosks could negatively affect their operations.
Talking before the House Commerce Committee, Xinaris said that small businesses would need access to larger capital to cater to consumer demand.
He argued that customers could walk in to buy a bottle of water costing 50 cents and ask for a 100 cashback.
Kiosks say they are being called upon to replace cash machines, creating the ground for unfair competition as smaller kiosks will not be able to offer the service as they have large cash reserves.
“Banks are closing branches and laying off staff while indirectly trying to gain from our labour for nothing”.
Xinaris said the service is being promoted for the benefit of the banks.
In conclusion, he cited a small shop in a remote area, which gives the residents cashback of about €600 when the daily turnover is much less.
On behalf of the Association of Cyprus Banks, Marios Nicolaou stated the cashback scheme had been offered abroad for many years.
Due to the closure of bank branches, this service enables the consumer to get money from the kiosks and other points of sale.
It is a voluntary service for shops and banks.
According to Nicolaou, a consumer can withdraw up to €100 per day per business.
A JCC representative said the service offers many consumer benefits, stressing it has been available for the past two years.
He said it is a free product, which is applied voluntarily.
Some 215 stores across Cyprus offer the cashback service, but there are efforts to widen the scheme.