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Free-to-use ATMs could fall despite LINK’s move to ‘rebalance’ the network

Written by: Paloma Kubiak
LINK has announced it will reduce interchange fees which should see consumers benefit, but a campaign group says this could still mean a decline in the number of free-to-use ATMs.

After proposing a number of measures last year to tackle the recent changes to interchange fees (a fee paid by card issuers to ATM operators often passed to consumers) and falling demand for cash payments, LINK has finally settled on its course of action.

The UK’s main cash machine network which runs 70,000 ATMs – 80% of which are free ­– said it would bring in a phased reduction in the interchange fee. It will begin with a 5% (1p) reduction from July 2018 and will then be reviewed each year to see the impact on consumers. This means when a customer withdraws money from an ATM, the card issuer will pay the operator 24p instead of 25p.

However, any ATMs 1km or more from the next free ATM will be exempt from this cut. Currently around 80% of free-to-use ATMs are within 300 metres of another free-to-use machine.

LINK will also triple the Financial Inclusion Programme from 10p to 30p to protect ATMs in more remote areas which should sway operators from establishing them in already densely-served areas. This means ATM operators in out of town centres or in deprived areas (where ATMs are in most need) are incentivised with an additional 30p on top of the current 25p interchange fee.

John Howells, chief executive of not-for-profit firm LINK, 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. The combination of a reduction of the interchange, with the significant strengthening of the Financial Inclusion Programme, will begin to rebalance the network, making sure we protect and install new ATMs in locations that really need them.”

However, Gareth Shaw, Which? money expert, said it is concerned about LINK’s ability to maintain free access to ATMs, not least when it is facing a clear threat from banks to leave the network.

Shaw said: “LINK’s plans could still lead to a significant reduction in free-to-use ATMs across Britain, leaving consumers facing an uphill struggle to access the cash they need.

“It’s alarming that these potentially far-reaching proposals appear to have simply been waved through without a thorough public consultation. With over two million consumers in the UK reliant almost entirely on cash, it’s vital that the Payment Systems Regulator conducts an urgent market review.”

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