Cashback service to be introduced in Serbia

17. October 2017 | Reading Time: 2 Min

The National Bank of Serbia and the Ministry of Finance have informed the public that a new service will be introduced in the coming period, known as “cashback.

Cashback service enables retail consumers, when making an in-store debit card purchase, to simultaneously make a cash withdrawal, using point of sale (“POS”) terminal. Therefore, a purchase must be made to receive cash back.

From the aspect of competence of the National Bank of Serbia and the Ministry of Finance there are no hurdles now for providing such service, while the decision on practical details regarding cashback lies with card systems, issuers and acceptors. All retailers with POS terminals – shops, kiosks, supermarkets, megamarkets, etc. are eligible to provide cashback service. Nonetheless, retailers’ participation in a cash back program is elective.

The card networks don’t specify a minimum amount that retailers must offer to consumers interested in receiving cash back. Retailers can use their own discretion. Normally, there is a maximum amount for cashback.

The cashback service does not require the issuance of any specific approvals to retailers (as it is not a payment service which is subject to the Law on Payment Services). For a retailer, only the form of the received money is changed – cash received daily is turned into deposit money equalling the amount of cash withdrawn by a consumer. Basically, retailers convert their own cash into electronic sales.

Financial services in Serbia are generally exempt form VAT without right to deduct input VAT. Consequently, the fees for services charged by a bank through which a payment is made, the fees charged by other financial participants as well as the fees charged by a retailer to its bank should be exempt from VAT without right to deduct input VAT.