Penny Market suspends cash-back service

In Hungary

Penny Market has stopped advertising their controversial cash-back service in their brochures and store employees are informing customers about suspension of the service, online economics and business news portal reported yesterday. 

Introduced in July, the service allowed customers to withdraw cash above transactions of HUF 3,000, without having to pay a transaction fee. The service, which is also practiced by another retail chain Coop and widely used in the Western world, has reportedly triggered criticism by banks and the National Customs and Tax Authority (NAV).

According to NAV, cash-back is a cash withdrawal transaction and banks have to pay transaction fees to the state accordingly. The separation of card payments from cash-back, however, requires major IT development on the bank-side, which might be a reason for suspension of the service by Penny Market. If this is the case, the suspension may only be temporary and the service could be re-launched after the necessary IT developments have been implemented, the daily noted.


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