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Link pledges to protect UK’s free ATM network

Link, the ATM network body, has pledged to maintain the UK’s free-to-use cash machine system after a key operator introduced fees for 1,000 of its machines.

“We’re not here to worry about the profitability of banks who pay the money or ATM operators who receive it,” said John Howells, Link’s chief executive. He said Link was focused on maintaining access to cash, with sufficient free-to-use machines.

NoteMachine, the nation’s second-biggest provider of ATMs, announced last week that, over the next three months, it would introduce charges at 1,000 of its 9,000 terminals, taking the total levying user fees to around 3,500.

The move comes after the pandemic accelerated a decline in cash use which is reducing demand for ATMs, forcing operators to close some machines and introduce user charges on others.

The market developments challenge Link’s aim — backed by the government — of ensuring wide access to free ATMs. A membership body, Link oversees the network behind some 51,000 ATMs owned by banks and cash machine operators. It sets the fees paid by banks to ATM operators — their main source of income.

While scores of banks own machines, the largest UK ATM operators are NoteMachine and Cardtronics, both US-controlled companies, with some 25,000 ATMs between them. Their machines also provide access to the Visa and Mastercard networks, often used by fintech companies.

In 2018-19, Link reduced payments by 10 per cent in an effort to rationalise the network amid declining usage. NoteMachine then threatened legal action before converting 40 per cent of its estate to a fee-charging model. Now the company has blamed low fees for its latest move.

Steve Makaritis, chief executive of NoteMachine, defended his decision. He said: “This move to pay-to-use comes after years of campaigning to sustain the funding that supports free-to-use ATMs.”

Link on Tuesday dismissed NoteMachine’s claims around fees, saying it had not seen droves of cash machine operators leave the network as a result of its 2018 decision and was satisfied with the current footprint of ATMs.

Still, NoteMachine’s decision will reinforce concerns about communities being left without easy access to cash. “NoteMachine’s decision to charge for withdrawals at over 1,000 additional cash machines will be a huge blow for the millions of consumers who rely on cash,” said Jenny Ross, Which? money editor.

Around £83bn was withdrawn in cash by consumers last year, down from £116bn in 2019, said Link.

NoteMachine said that only a tiny fraction of ATMs are “protected” — meaning banks are required to pay a premium per cash withdrawal at those which serve low footfall areas. This is intended to keep ATMs operational on a free-to-use basis.

Column chart of Cash machine numbers showing ATM numbers have been in chronic decline as card transactions surge

Debit card transactions overtook cash payments in 2017, with the total of free-to-use ATMs having fallen since. There are now about 40,000 free-to-use ATMs across the country, compared with some 11,000 pay-to-use machines.

Under the proposed financial services and markets bill, the Financial Conduct Authority will gain powers to ensure that banks and building societies provide access to cash. Link currently intervenes to install ATMs where there is a lack of coverage.

Howells said: “Industry can’t do anything about retailers accepting cash and that is going to be what drives cash usage down . . . at which point if we haven’t got everyone able to use digital, we’ve got a massive exclusion problem.”

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