High Streets Initiative · 2 November 2017

High streets threatened by potential loss of thousands of free-to-use cash machines

Built-in ATM machine with blank display on concrete background. Mock up, 3D Rendering
A third of Britain’s free-to-use cash machines are thought to be at risk

Britain’s independent high street business owners could suffer under new proposals that would see the number of free-to-use cash machines slashed across the UK, leaving consumers with a potential shortage of physical money.

LINK, the UK’s largest cash machine network, is holding a consultation with the 30 banks and building societies it represents over reductions to the “intercharge” fee. The fee covers withdrawal costs for consumers and often sees high street banks with the largest number of customers hit with sizeable bills to keep cash points free to use.

The proposals arrive ten months after a row among the network’s members regarding how the intercharge fee was calculated, and have sparked fears that free-to-use cash machines would begin charging or disappear altogether.

The network has defended its plans and claimed any reduction in free cash machines would be in areas where there are currently multiple ATMs “very close together”.

Responding to the proposals, LINK CEO John Howells insisted that although free ATMs could fall in number, the network remained committed keeping cash flowing across UK communities.

“LINK is committed to maintaining an extensive network of free-to-use cash machines. Free access to cash is vital for UK consumers and LINK intends to maintain this for many years to come,” he said in a statement.

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Howell’s said the number of free ATMs was at near-record levels, with 80 per cent of the country’s 70,000+ cash machines operating without charge.

However, the plans have come under fire from the ATM Industry Association (ATMIA), which has warned that consumers could see thousands of currently free-to-use cash points either disappear or begin charging a fee.

Research from ATMIA has suggested that as many as three quarters of transactions made in small convenience stores are still made using cash.

Speaking to Sky News, ATMIA chief executive Ron Delnevo warned that LINK’s proposals threatened to destabilise the other 22,000 indepedently operated free-to-use cash points.

“These kind of cuts will make a lot of these services uneconomical,” he said. “In theory, all of these are at risk.”

LINK has pointed to data from UK Finance which predicted that the number of cash payments made to businesses over the next ten years will fall by 43 per cent, with the average transaction value also expected to decline.

However, a study by the UK Card Association last year found that 70 per cent of small business owners still felt cash was the best way to receive a payment, followed closely by bank transfers and traditional cheques.

Read more from the Business Advice High Streets Initiative

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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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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