Cash machine operator LINK has announced a series of measures designed to “maintain and rebalance” the UK’s ATM network, which includes a reduction in interchange fees.

There will be a phased reduction in interchange fees (the fee card issuers pay to ATM operators) beginning with a five per cent reduction from 1 July 2018. LINK said it will review the position on fees annually, taking into account the impact on consumers.

Secondly, all ATMs one kilometre or more from the next free ATM will be exempt from any reductions in interchange. An enhanced subsidy of up to 30p (tripling the current 10p) will be paid wherever needed to ensure that free ATMs remain in areas that could not otherwise sustain them.

LINK will also strive to retain free access to cash for all communities in the UK. It will publicly monitor the whole country, report on free ATM availability, and highlight any areas where free ATM availability is lost. It will then use the Financial Inclusion Programme to ensure that all communities retain free access to cash.

LINK’s decision is in response to new data which showed that current incentives were driving ATM deployers to focus on city centres – with 80 per cent of free-to-use ATMs now within 300 metres of another free-to-use machine.

John Howells, chief executive of LINK, said: “LINK is committed to protecting free access to cash. The UK has a near record number of ATMs, yet the recent growth has led to the majority of these being placed in busy areas where there simply is no need for a new ATM. The combination of a reduction of the interchange, with the significant strengthening of the Financial Inclusion Programme, will begin to rebalance the network, making sure we protect and install new ATMs in locations that really need them.”

Concerns have been raised over LINK’s proposed interchange fee change since the plan emerged in November, with consumer group Which? last week warning that the move could ultimately lead to fewer free-to-use cash machines across the UK, particularly in rural communities.

Responding to today’s news, Federation of Small Businesses national chairman, Mike Cherry, said: “Access to cash is absolutely vital to local growth in rural and deprived communities. Too often we hear of towns running out of cash because current cashpoint provision simply isn’t good enough. Consumers and small firms have already been hit by thousands of bank branch closures in the last few years. Now our cash machine network is under threat. We’re not convinced that today’s announcement includes enough protections for vulnerable communities.”

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