Up to 30,000 free-to-use cash machines – 45% of the UK total – are on course to disappear over the next five years amid cuts in fees received by operators, it is being claimed.
According to the ATM Industry Association (ATMIA), changes to the so-called interchange fees – charges paid to operators by banks per withdrawal – being imposed by the LINK network will cut access to cash at a time when banks are shutting more branches.
LINK has previously argued that the cost of running its network is unsustainable at a time when more people are banking online and using contactless card payments.
It announced on Tuesday that it was bringing forward a series of measures that it said would safeguard access to free cash.
It said a new fee structure would “shift incentives from deploying ATMs in city centres to rural and less-affluent communities” to secure free-to-use machines for the whole of the country.
According to LINK, the changes would mean free ATMs that are more than 1,000m from the next free machine are exempt from cuts to fees – and those in rural communities would get an enhanced subsidy to incentivise continued provision.
The majority of machines – mostly in major towns and cities – would see a phased reduction in the interchange fee.
Image: Online banking and contactless card payments are putting ATMs under threat
John Howells, LINK’s chief executive, said: “LINK is committed to protecting free access to cash.
“The UK has a near record number of ATMs, yet the recent growth has led to the majority of these being placed in busy areas where there simply is no need for a new ATM.”
He said the country was on course for a rebalancing of the network to “protect and install new ATMs in locations that really need them.”
But LINK was accused of ignoring criticism of fee cuts in its consultation.
The ATMIA’s executive director for Europe, Ron Delnevo, told Sky News it was “rubbish” to suggest the country had too many cash points amid industry predictions of a cash-less society.
He said: “There are forecast to be a further 3,000 bank branch closures in the next four years.
“Each branch has on average two ATMs, so those branch closures will see ATM numbers fall by 6,000 anyway.
“Why does LINK interchange have to be reduced to cause more ATMs to be removed?
“LINK’s proposed reduction will render 25,000 to 30,000 free-to-use ATMs away from bank branches uneconomic over the next 4 to 5 years.
“Many will have to be removed or switch to pay-to-use.”
MPs warned they would oppose any reduction in access to free cash.
Nicky Morgan, chair of the Treasury Committee, said: “This will be the first major test for the Payment Systems Regulator (PSR).
“They must ensure that customers do not lose out as a result of LINK’s proposals.
“LINK’s monthly reports to the PSR on the impact of these changes should be put in the public domain. If concerns remain, the regulator should not hesitate to intervene.”
Cardtronics, the country’s largest independent operator with 20,000 ATMs, said it wanted more clarity on the potential impact of LINK’s changes and demanded the PSR intervene.
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A spokesperson said: “We need an ATM network that is able to respond to the changes in today’s banking landscape, where we’re already seeing record numbers of bank branch closures up and down the country.
“But the arbitrary cuts that LINK has announced, are not a viable solution.”