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Free-to-use cashpoints under threat of closure

Robin Bowman

Robin Bowman
Jan 31, 2018


Thousands of free ATM points could be heading for the chop following a threat to cut the fee paid to operators.

In a move by Link, which oversees cashpoints, to encourage more machines to be placed in out-of-the-way locations, fees of ATMs more than 1km away from the nearest alternative cashpoint will stay the same.

The ATM-industry body warns that the move could mean as many as 30,000 cashpoints will disappear.

A fee, which his known as the interchange rate, is paid by banks to operators. This will be reduced from 25p per transaction at present, to 20p per withdrawal, says Link.

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The reduced rate will come in from July this year.

Shift incentive

Link says the change will "shift the incentive" for operators that have been crowding ATMs in city centres to move some cashpoints to rural and poorer areas.

Link is also making other changes to create a more even spread of ATMs.

These include:

The phased reduction in interchange (the fee card issuers pay ATM operators) beginning with a 5% (around 1p) reduction from 1st July 2018.  The position will then be reviewed annually taking into account the impact on consumers. 

An increased subsidy of up to 30p (tripling the current 10p) will be paid wherever needed to ensure that free ATMs remain in areas that could not otherwise sustain them.

“Link will do whatever it takes to retain free access to cash for all communities. It will publicly monitor the whole country; report on free ATM availability; and highlight any areas where free ATM availability is lost. It will then use the strengthened Financial Inclusion Programme to ensure that all communities retain free access to cash,” it announced. 

LINK’s decision is in response to new information that shows ATMs are currently clustered in city centres, with 80% of free-to-use ones now within 300m of another free-to-use machine.

Disaster

But the plans have drawn criticism.

Ron Delnevo, executive director of the ATM Industry Association (ATMIA), said that the current network of 55,000 ATMs was "providing financial inclusion everywhere".

"To lose any of them would be a disaster, but we will lose 25,000 to 30,000 from these measures if they are allowed to go ahead, which they should not," he said.

The consumer group Which? also said the changes could lead to "mass closures" of free-to-use machines. 

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