Thousands of ATM cash machines to close

If it wasn’t bad enough that bank branches are closing at an alarming rate (see our blog article from February of last year) banking customers have just learnt that literally thousands of free-to-use cash machines could be closed because of a cut in the fee that operators receive from banks each time an ATM is used.
The move is an attempt by Link (which oversees ATM machines) to encourage operators to place the machines in more remote areas. But the ATM industry body has said that this would see up to 30,000 ATMs disappear altogether.
According to Link the fee that is paid (known as the interchange rate) will be reduced from 25p to 20p per withdrawal, in annual steps over four years, to protect the network.  However, the fee will be unchanged for free-to-use ATMs which are a kilometre or more from the next nearest cash machine.
The cut in the fee will take effect on 1st July this year. The situation will then be reviewed every year to assess its impact on customers.
Link said that the move would "shift the incentive" for operators, which have been clustering ATMs in city centres, to move some to rural and less affluent areas. An extra subsidy of 10p per withdrawal, currently available to 300 ATMs, will be tripled to 30p for some of the cash machines in more remote areas with little access to cash machines.
John Howells, the CEO of Link, said: "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."
But the plans have been heavily criticised by the industry and some consumer groups. Ron Delnevo, Director of the ATM Industry Association said that the current network of 55,000 ATMs was "providing financial inclusion everywhere."
"To lose any of them would be a disaster, but we will lose 25,000 to 30,000 from these measures if they are allowed to go ahead, which they should not," he said.
Consumer group Which? said the move could lead to "mass closures" of free-to-use machines, adding to the 200 communities in Britain that already had poor ATM provision, or no cash machines at all.
Mike Cherry, Chairman of the Federation of Small Businesses has called for a full public consultation on the plans. He said that the proposals didn’t include enough protection for vulnerable communities.
"There's no guarantee that having everyone within a kilometre of a cashpoint will be enough to meet demand. Equally, we need to question whether it's right to make vulnerable ATM users travel a kilometre every time they need cash.”
Nicky Morgan MP who chairs the House of Commons Treasury Committee, has also expressed concern over whether there will be an even spread of ATM machines across the country. The Customer Service Blog will be keeping a close watch on how the Government reacts to this development and will be reporting back when we have more details.

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