Card Machines to Close

Posted by Kirstie Brown in Personal Finance on 30 January 2017 - Kirstie is a Senior Credit Analyst at checkmyfile.

Consumers are being warned that the UK could lose 35% of its free cash machines unless a deal is secured to cover the annual £1bn running costs.

A system known as ‘Link’ currently allows customers of all banks to use other providers’ cash machines free of charge, however the future of this is in question. The Link network currently operates 70,000 ATMs in the UK (75% of which are free), with 39 members including Banks and Building Societies.

Banks in the UK say that they pay too much for the use of independent cash machines from providers which include PayPoint and Note Machine. Independent companies own 57% of the UK’s 70,000 cash machines – these tend to be located in supermarkets, shops and newsagents. Each time a transaction is made, the individual’s bank pays just under 30p to the cash machine company.

The ATM Industry Association (ATMIA) have said that information received from independent operators at the centre of the row meant that more than 8,000 of the current 54,000 free-to-use ATMs were at risk of being turned off or charging customers to withdraw cash.

This could result in millions of people in rural areas of the UK losing the ability to access cash on a day-to-day basis, making them more reliant on ‘cashless’ payments like bank cards, online transactions and smartphone payments. Areas such as the South West, Scotland and the South East, where 44%, 40% and 33% of cash points are under threat, will be hit the hardest as these regions have suffered the most bank branch closures in recent months. Some of the major cities would also lose out if these free ATMs were lost. London would lose the most machines, while Belfast, Glasgow, Birmingham, Sheffield and Cardiff would also suffer.

This especially affects the aging population, as branch closures and a lack of ATMs would leave them financially excluded from society. Simon Bottery from Independent Age says, "Elderly people are not ready for this. The most obvious issue is that they tend to be less mobile so they can't shop around for a free cash point. In order to avoid paying fees they may pass on cards to friends or family who are more able to get to a free cash point, however this not a good idea for people as it opens them up to financial abuse."

Members of Link, including banks and independent ATM providers met on Thursday at Canary Wharf in an attempt to resolve the dispute, but currently this issue remains ongoing.

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