High Streets Initiative · 29 November 2017

MPs step in to preserve access to free ATMs throughout Britain

Young woman taking money from ATM
MPs have warned plans to reduce charges for operators could make many free cash points economically unviable

The network responsible for free-to-use cash points across Britain must ensure that every community maintains access to ATMs, a committee of MPs has said.

Responding to proposals published by the LINK network last month, Commons Treasury Committee chair, and Conservative Party MP, Nicky Morgan said any significant reduction in free cash machines would harm local economies.

In October, LINK opened a consultation with the 30 banks and building societies it represents regarding plans to reduce the 25p interchange fee to 20p. The network has claimed the changes would help protect the 55,000 free ATMs it oversees, while also responding to a “predicted fall in consumers’ demand for cash for payments”.

However, the plans were criticised by the ATM Industry Association (ATMIA), which warned that consumers could see thousands of currently free-to-use cash points either disappear or begin charging a fee.

The committee of MPs agreed that a 20 per cent reduction of the transaction charge could put many free ATMs under threat, and Morgan said it was “intuitive that some machines will become economically unviable”.

“There have been concerns that the proposals could lead to ‘ATM deserts’ for communities. As the Bank of England’s chief cashier said, cash continues to play a key role for many, with 2.7m people in the UK reliant almost entirely on cash transactions,” she added.

“I have asked LINK for assurances that the proposals will preserve the existing geographic spread of ATMs, and will have no negative impact on financial inclusion.”

The Association of Convenience Stores (ACS), a group representing Britain’s small shops, welcomed Morgan’s comments as a show of support to local business owners.

James Lowman, ACS chief executive, said: “Free to use cash machines support not just the businesses that house them, but also other shops, markets and small businesses that still rely on cash for payment. Reducing interchange fees, payable by banks for their customers to use these facilities, could lead to some cash machines being removed from local shops.

“We welcome Nicky Morgan’s comments on this issue and urge LINK to think carefully about the consequences of the ATM network shrinking.”

Ron Delnevo, ATIMA chief executive, also greeted Morgan’s comments, declaring examination of the plans by MPs as “wonderful news”.

He added: “It is now essential that Link addresses these concerns with adequate and detailed responses before rushing through any ill-considered decisions, which threaten the viability and vitality of thousands of communities around the UK by denying them access to cash from free ATMs.”

According to ACS’ 2017 Local Shops Report, over three quarters of convenience store customers pay in cash, while almost half of shops in the convenience sector have a free-to-use cash machine.

In-store technology is the key to high street success this Christmas

This article is part of a wider campaign called the High Streets Initiative, a new section of Business Advice championing independent and small retailers by identifying the issues that put Britain’s high streets under pressure. Visit our High Streets Initiative section to find out more.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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