Hundreds of non-charging cash machines are to be installed in low income areas around the UK following a deal between banks, ATM operators and the government.
The ATM working group said that more than 600 machines would be provided near homes in socially deprived areas in a bid to improve financial inclusion.
In addition, fee-charging operators will be forced to place signs prominently on their machines to ensure that it is ‘crystal clear’ to customers that they will be charged.
The working group was set up by the Treasury to examine ways to improve access to ‘free’ machines in low income areas.
People in socially deprived areas often find that their nearest machines charge an average £1.50 for withdrawal, with some machines charging as much as £3.
Research has found that of the 58,000 cash machines in the UK, 40 per cent charge a fee and it is often the poorest areas that are hardest hit through lack of free machines.
To combat the problem, the working group has announced that a ‘financial inclusion premium’ has been built into the rules of the UK LINK ATM network.
Under the initiative, banks and building societies will pay a premium on interchange fees – which are paid to cash machine providers – to operators who run free machines in lower income areas.
Chair of the ATM working group, John McFall, said: ‘This is a huge step forward in the campaign for financial inclusion.
‘The banks, building societies and cash machine operators who have worked with us on this plan deserve to be congratulated for their constructive and innovative work, which will mean a huge expansion in access to free cash machines for people in low income areas, vital for economic activity in those areas.’
A number of sites have already been identified for the new machines, while consultations on other locations are under way.
Which? Senior Policy Adviser Pula Houghton said: ‘Which? is pleased that many banks and other institutions are now committed to installing free cash machines within identified areas of need. We hope the announcement of the financial inclusion premium will accelerate this process.
‘Which? believes that consumers should have access to their money, without extra fees, whether through a cash machine or the Post Office, and within a reasonable radius.
‘However, it is imperative that these new measures are sustainable. Banks and building societies must remain committed in the long-term to keeping this scheme going. Which? will be watching the scheme closely to ensure it makes a real difference for consumers.’