A new cash-based online payments service launched today could provide e-retailers with a new market, while helping to reduce transactional risks for goods bought online from their stores.

Cash Payments is a new service from PayPoint.net, the online arm of PayPoint, which has around 20,000 terminals located in UK stores used primarily for the payment of bills and services.

The new service offers consumers the option of receiving a printable 19-digit reference number and barcode after 'buying' online, which they take to their nearest PayPoint terminal and pay cash for the service.

The merchant will then be notified via a 'Get' or 'Post' call back request to its server and, because no user accounts or bank details are required, the risk of fraud is reduced for the retailer, according to PayPoint.net managing director Alessandro Hatami.

"We are keeping things as simple and as easy as possible," he said. "And retailers are safer because payment is guaranteed, so there is no chance of chargeback [in the event of fraud]."

Research by YouGov commissioned by PayPoint.net found that around 20 per cent of consumers are turning to cash to purchase goods, rather than debit or credit cards, in order to better manage spending and reduce the risk of fraud.

The firm is also hoping to target around two million consumers whom it believes could be excluded from online shopping because they are ineligible for credit or debit cards, said Hatami.

The scheme currently has around 5,000 retailers onboard, but its success will depend on encouraging large enough numbers in order to attract consumers, according to Andrew McClelland, director of business development at industry body the IMRG.

"One of the biggest drivers for [retailers expanding] online is that it provides a greater choice for the customer, and providing a range of financial instruments adds to that choice," he said.

"Retailers are becoming more aware of how to attract and keep customers, and a lot of benefit will come from this service."

Mark Hoban, shadow minister for the Treasury, agreed that the service would appeal to those who have been excluded from online shopping because they are not able to pay by credit or debit card.

"Something that enables these people to use cash on the internet is quite helpful because it works with the way they manage their money," he added.