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Which? urges more scrutiny on threat to UK’s cash machines

LINK, the UK's largest cash machine network, announces plans to close ATMs

Millions of people that rely on withdrawing cash to make transactions are in danger of not being able to access their money easily without incurring costs. 

LINK, the UK’s largest cash machine network, announced plans to close down a large number of free-to-use ATMs, and potentially increase the number that charge people to withdraw their own money.

There are roughly 70,000 cash machines across the UK, including 55,000 which allow customers to take out cash without charge.

Which? has been campaigning against the proposal to protect people and businesses, especially those in vulnerable communities where a reduction in free ATMs would severely limit their ability to access their own money easily. It wants the regulator to closely scrutinise any plans before they come into effect.


Are ATMs closing down?

LINK recently announced a proposal to lower its interchange fee by 20% over the next four years.

The interchange fee is a payment made by banks to ATM operators every time a person withdraws cash and it goes towards maintaining the free-to-use ATMs.

It is calculated by dividing the cost of running free-to-use ATMs by the total number of transactions carried out.

Currently the interchange fee is 25p per cash withdrawal but LINK’s proposals would see this decrease to 20p.  The proposed reduction of the interchange fee could result in a large number of cash machines becoming unprofitable therefore resulting in them being closed.

The ATM Industry Association has estimated that around 10,000 free cash machines could be at risk.

Which areas will be affected?

At this stage it is difficult to predict which areas will be most affected by the ATM closures.

Independent analysis conducted by Which? has identified parts of the country that already have limited access to free-to-use ATMs and could be worst hit by the closures.

Doogal, Darlington, Newcastle Upon Tyne, Norfolk and Inverclyde are among some of the postcode areas with the highest concentration of ‘cash deserts’ where people have no access to ATMs at all.

Cash machines both free-to-use and paid are located across a variety of property types. According to UK Finance, last year 47% of ATMs were located at supermarkets and other retail spaces, 26% were at an on-site bank branch and 4% were at the Post office.

Do people still use cash?

Although new ways of paying have been developed, cash is the most widely used method of payment in the UK with around 2.7 million people relying on cash entirely.

The Bank of England has confirmed that the total demand for banknotes increased 10% last year – its fastest growth in a decade.

According to UK Finance, in 2016 consumers and businesses made 15.4 billion in cash payments – 25% more than debit cards which were the second most frequently used method.

Which? calls for regulatory intervention

LINK’s changes have the capacity to disrupt the lives of millions of people who rely on free-to-use cash machines. Which? is therefore calling for the Payment System Regulator (PSR) to conduct a comprehensive market review to really measure the impact.

There are growing concerns that LINKs changes are driven mainly by pressure from banks to cut costs rather than focusing on the needs of consumers, especially those in vulnerable communities.

While LINK claims that there has been a decline in the demand for cash, it remains the most frequently used method of payment across the nation.

Which? strongly believes that the LINK proposals should not go through without a wider review that looks into alternative options for accessing cash. There also needs to be a full examination of the ATM market before such radical changes are allowed to go through.

With bank closures now totalling 1,962 since 2015, people across the UK are already facing huge constraints when it comes to handling their money. Our interactive map shows the 482 bank branches closed this year.

Restrictions such as access to free-to-use ATMs will undoubtedly limit our access further.


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