Approximately 30,000 free-to-use ATMs could be shut down due to Link’s new interchange reduction plans.
The UK ATM operator has proposed a 5% reduction in the interchange rate from 1 July 2018, which would bring it down to 24p from 25p.
This is the first of four annual reductions of 5%. However, each reduction will be subject to further review.
This is part of Link’s overall plan to reduce interchange fees from 25p to 20p over the next four years.
In an attempt to keep free-to-use ATMs in smaller, rural areas, there will be no change for free ATMs one kilometre or more from the next free ATM.
Another slight relief is that an extra subsidy of 10p per withdrawal, currently available to 300 ATMs, will be tripled to 30p for some of the cash machines in areas with little access to cash.
The ATM Industry Association (ATMIA) believes that this move could see around 30,000 ATMs disappear city centres.
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.”
Tracey Graham, Independent Chair of the LINK Consumer Council, added: “I am very pleased to see LINK is significantly strengthening its Financial Inclusion Programme. This will help protect existing ATMs and ensure consumers in remote and rural areas will still get access to the cash they need. The Consumer Council will continue to provide scrutiny and advice to the LINK Board on the vital importance of maintaining free access to cash.”
Hannah Nixon, Managing Director of the Payment Systems Regulator, said: “This is a welcome improvement. I am pleased that LINK has bolstered its initial plans to make sure people will continue to have widespread free access to cash.
“We will require LINK to provide us with regular, detailed reports on the impact the changes are having and the steps that LINK will take to address any negative impact. We will intervene if we believe the current broad geographical spread of free-to-use ATMs is threatened.”