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Tuesday 23 October 2018


LINK proposes free ATM funding shake-up

Written by Chris Lemmon

Cash machine network LINK is proposing to reduce its interchange fee, but the plan has been criticised for potentially cutting the number of free-to-use ATMs in the UK.

LINK is consulting its members and the LINK Consumer Council on proposals to reduce the level of interchange - the fee paid by card issuers (banks and building societies) to ATM operators - by up to 20 per cent.

However, the move has been heavily criticised by an industry association for its potential to cause a reduction in the number of ATM machines.

Ron Delnevo, executive director Europe of the ATM Industry Association, said: “Make no mistake, the proposed reductions in LINK Interchange may well lead to a vast reduction in free access to cash for British citizens and businesses.

“Any money saved by a tiny number of banks, which some estimates put at tens of millions of pounds each year, will effectively be at the expense of already hard pressed consumers. This when ATM costs in the UK are already amongst the lowest in the world.

“An unwarranted shake-up of Link, an ATM network admired around the planet, will hit the most hard-up the heaviest – particularly the millions of people who rely on cash for day-to-day budgeting. At the same time, businesses located in communities without access to cash will lose customers to bigger city centres.”

The LINK proposals include:

• A 20 per cent reduction in interchange rates over the next four years, from around 25p to 20p per withdrawal. This will retain an extensive network of free ATMs for consumers, whilst avoiding the growth in ATM numbers that has occurred over recent years, despite declining consumer demand for cash for payments.

• The proposed reduction in interchange of five per cent per year is intended to give ATM operators the opportunity to reduce their costs through efficiencies and minimise any reduction in ATM numbers.

• Boosting LINK’s Financial Inclusion Programme to maintain extensive free access to cash for all in the UK. This builds on existing measures that ensure provision of ATMs in deprived communities, where demand would not otherwise make one viable.

• Maintaining the present geographical spread of ATMs, with any reduction in the number of ATMs intended to be in areas where there are currently multiple ATMs very close together. Around 80 per cent of free-to-use ATMs currently are within 300 metres of another free-to-use machine.

LINK has pointed out that the number of cash machines in the UK is currently at near record levels, with more than 70,000 ATMs across the country, around 80 per cent of which are free-to-use.

LINK’s CEO John Howells commented: “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.”

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