Hundreds of cash machines across the UK are closing down as UK is turning to contactless payments
Hundreds of cash machines across the UK are closing down as UK is turning to contactless payments. According to an analysis by Which?, ATMs around the country are shutting down at a rate of 300 every month and rural operators are worst hit.
A sudden increase in contactless payments for small transactions on the Link network between November 2017 and April 2018, among other reasons, made cash less necessary which led to the closure of almost 1,500 machines.
But campaigners have said a planned cut in fees paid by banks for each withdrawal, beginning on 1 July, is already making it more difficult for independent operators to survive, particularly in thinly-populated areas.
The UK currently has around 70,000 ATMs, and more than 97% of withdrawals are from free-to-use machines. But from Sunday the fee paid by the banks for each withdrawal will be cut from 25p to 24p, the first stage of a phased reduction down to 20p. The cut may appear small, but independent operators, which run many of the machines in convenience stores in remote locations, have said it is likely to make many ATMs unprofitable.
Which? said the pace of closures has accelerated rapidly since 2015, and despite promises by the Link network to maintain access, rural areas are the most affected.
But Link defended the closures saying that a fall in cash usage has made maintaining ATMs unsustainable as 80% of machines are within 300 metres of another cash point.
Link said that over the last 10 years cash payments have fallen by 33%, during the same period free ATM numbers have grown to 18,000 (50%). This disconnect is not sustainable and needs addressing now to protect Link and future access to cash for consumers.
It said it was aiming to protect rural communities by reducing the “interchange” fee in busy centres but increasing it in more remote areas.
But others suspect banks of forcing consumers away from cash. The head of policy and advocacy at the not-for-profit financial campaign group Positive Money, David Clarke said that more than two million people rely almost exclusively on cash every day. There is still massive demand for cash, with 77% of people seeing free access to cash as essential for their lives. It is only a minority of people who are going completely cashless.
This is all about the banks wanting to cut the fees they have to pay rather than anything else. Link has been forced into these cuts by the banks who are threatening to move to Visa and MasterCard schemes where the fees are even lower, but which would result in much deeper cuts to the free ATM network.