It’s been a while since my last visit to the Community, hence the late follow-up
Differentiating between “Purchase” and “Cash” transactions is definitely not UK specific. Moreover, there is a whole load of Merchant Category Codes (MCC) one of which is used for every transaction. They tell the card network and the issuer which kind of purchase (or cash transaction) the payer has made. Examples are:
- “Grocery Stores, Supermarkets” (5411)
- “Service stations” (5541)
- “Automated Fuel Dispensers” (5542)
- “Automated Cash Disbursement” (6011).
Using MCCs issuers and schemes can
- grant or deny cashback which is only given on certain purchase categories
- apply special processing rules (e. g. for Automated Fuel Dispensers)
- do or do not charge a fee for cash withdrawal.
So, although there may be other mechanisms, the issuer of the underlying card is relying on the MCC to identify a transaction as a cash withdrawal. In the days before Curve began to pass through the original MCC to the underlying card that could come in quite handy for withdrawing cash for free with cards that would otherwise charge a hefty fee for that. On the other hand, it prevented many users from getting their usual cashback or reward points. Also, today there are more and more cards on the market that allow for free cash withdrawal, anyway.
Edit: While talking about MCCs, I just learned that apparently Curve is changing some MCCs to more general ones for some reason which brings some of the problems with cashback and reward points back on the table.
Example: MCC 5941 (“Sporting goods store”) is apparently changed to MCC 5999 (“Miscellaneous retail stores”)
More on that in this thread.