Halifax Building Society Warrington

The cashback scheme goes hand-in-hand with the Halifax's £100 incentive for customers switching their current accounts from other providers. Photograph: Christopher Thomond for the Guardian

Halifax has become the latest current account provider to offer a cashback programme to customers, as the battle to win business hots up ahead of new seven-day account switching rules.

The Cashback Extras scheme will offer payments of between 5% and 15% on purchases made using credit and debit cards at well-known retailers, including Morrisons, Argos and Homebase.

The bank said customers could make more than £100 a year though the scheme, and there is no cap on how much can be earned. Cashback is paid in the month following a purchase.

However, to get the money, customers must log on to internet banking and activate one of the offers available before they shop. They will also only be able to access deals that Halifax has identified as relevant to them, based on their normal spending habits, and, depending on the offer, may have to reactive the cashback each time they want to shop with the same retailer.

The scheme is available on all Halifax accounts with debit cards, and goes hand-in-hand with the bank's £100 incentive for new customers switching their current accounts from other providers.

Anthony Warrington, director of Halifax current accounts, said: "Everybody's trying to make their money go further, which is why so many people already use voucher sites, discount codes and loyalty cards."

Warrington said Cashback Extras would "make this process easier and more rewarding for Halifax customers" who could avoid "the hassle of vouchers, codes, points or visiting different websites".

The scheme is set to go live after the launch of seven-day switching rules on 16 September.

The rules will mean that consumers who want to move their accounts to a new bank will have their direct debits and other payments in place within a week, with account providers forced to refund any charges resulting from misdirected payments.

Competition has been building ahead of the change, with NatWest and RBS also recently launching a cashback offer. Its scheme offers account holders 1% back on purchases made at 11 retailers and requires only one online activation before paying out each time customers use their debit cards.

Kevin Mountford, head of banking at comparison website Moneysupermarket, said banks were launching rewards programmes in a bid to improve loyalty and retain customers.