PayPoint is partnering with Link, the UK’s largest cash machine network, to pilot a new “cash over the counter” withdrawal service in an effort to improve access to cash.

Under the new service, which will be trialled at 15 locations this summer, cardholders will be able to withdraw up to £100 and receive exactly the amount they need, down to the last penny - subject to availability.

Customers will insert their bank card and PIN in to a PayPoint terminal, telling the retailer how much they would like to withdraw. The retailer will give them cash directly from their till.

With a minimum withdrawal of just 1p and completely free to use, the service is designed to give people another way to access their money free of charge and to strengthen financial inclusion.

If the trial is successful, the service is likely to be rolled out to complement existing ATM coverage in 2019. The trial locations are yet to be confirmed.

Mo Razzaq, of Family Shopper in Blantyre, near Glasgow, said the service would bring positives and negatives.

“It would save me on banking charges as I wouldn’t need to pay to deposit cash at the bank. But at the same time it could leave me vulnerable to robbery with more cash in the till,” he said.

“On the other hand, if there’s not enough in the tills then customers would blame us if we can’t give them the cash.

“Ultimately though, is it worth it? If there isn’t commission, I wouldn’t do it.”

A PayPoint spokesman said commission would work in the same way as current ATM transactions. “This is obviously different to cash back, where retailers get charged.

“The pilot will seek to address areas like cash handling and customer experience in conjunction with retailers,” he added.

PayPoint chief executive Dominic Taylor, said: “We’re delighted to be working closely with Link to bring an innovative solution to market that will help customers and local retailers alike.

“This is yet another example of how local retailers are playing a critical role in delivering vital services to their local communities every day across our network of 29,000 stores, a network bigger than all banks, Post Offices and supermarkets put together.”

Link ceo John Howells said: “Link is committed to promoting financial inclusion and supporting extensive free access to cash. The number of ATMs is at a record high, but there are still areas, including rural and remote communities, where cash access can be significantly improved.”