The first of four cuts to the ATM interchange fee, the fee that funds the free-to-use cashpoint network, have come into force. We’re concerned about the impact on communities’ and consumers’ ability to freely access cash.
This Which? Conversation was originally published on 12 September 2018.
Despite the introduction of a host of measures to lessen the impact on cashpoint closures on rural communities, including a bolstered Financial Inclusion Programme, we remained unconvinced that Link would be able to minimise the closure of machines across the network.
So we analysed Link’s own data to track cashpoint numbers from November 2017, when these plans were first unveiled, up until April 2018.
And our figures show that we aren’t alone in our concern, as cashpoint closures following Link’s announcement actually increased six-fold from 50 per month in 2015 to 300 a month during the six-month period we analysed.
As cashpoint operators geared up for the change, it’s clear that in many cases they were removing machines that may no longer be financially viable – demonstrating that even operators agree Link’s measures simply aren’t good enough.
Speaking to Which?, one of the largest independent cashpoint providers, NoteMachine, said learning of the changes in late 2017 had ‘an immediate effect’ on its ability to maintain widespread free access, while the ATM Industry Association (ATMIA) told us the move set the network on ‘a path to disaster’.
Rural communities worst hit
Our investigation found more machines were lost proportionally in rural communities (-2.1%) than urban areas (-2%) across the UK, despite Link’s pledge that these changes would target urban, not rural machines. Coupled with the rate of bank branch closures, such closures will hit rural communities especially hard.
In particular, we found:
- The UK lost 2% of its network: 2.1% was lost in rural areas, against 2% in urban
- Scotland’s rural network was the hardest hit, suffering a 2.9% loss (urban areas saw a 2.1% reduction)
- Wales lost 2.1% of its rural machines, with 2.3% losses to its urban network
- England lost 2.1% in urban areas and 2.1% in rural communities
- Northern Ireland gained 2.5% in urban areas, with a 0.5% loss to its rural network.
Call for action
With hundreds of cashpoints closing every month we have serious concerns that, far from protecting consumers’ access to cash, Link’s plans risk destroying it.
Link initially rejected these findings. However, far from disproving our analysis, Link data published on its website showed that the rate of closures may actually be higher, with 500 machines a month closing between December 2017 and June 2018.
While many of us may have moved on to digital forms of payment, such as contactless cards, it is clear that more work needs to be done to ensure that free access to cash is maintained.
This is particularly important for the millions of consumers who continue to rely on cash in their daily lives.
We want the Payment Systems Regulator (PSR), Link’s regulator, to intervene urgently and halt the cuts to the interchange fee until a thorough review of the cashpoint network is conducted.
This should look at the impact of Link’s decision over the next four years; underlying competition issues impacting the sector; and the future of cash.
How important is access to cash free of charge to you?
Update: 13 July 2018
We hosted over 50 MPs at an event in Parliament this week as part of our campaign to save our cashpoints. We discussed the impact of ATM closures on consumers and small businesses across the UK and used our supporter reporter tool to map out the existing ATM network and highlight the potential impact of closures in their local area.
— Ged Killen (@Gedk) July 12, 2018
The feedback was overwhelming – it’s clear that too many communities are being hit by bank branch closures, poor digital infrastructure and now ATM closures, putting free and easy access to cash at risk.
We are asking MPs to help us put pressure on the regulator to step in and protect free access to cash.
Update: 12 September 2018
More than 250 free-to-use cash machines are disappearing every month as operators shut unprofitable ones, the network co-ordinator Link has admitted.
We’ve condemned these shocking figures publicly, demanding that the Payment Systems Regulator (PSR) urgently intervenes to stop further closures and ensure no more consumers are suddenly stripped of their access to cash.
Managing Director of Which? Money, Jenni Allen, said:
“The rate at which free-to-use cashpoints are closing is alarming and it is clear that LINK is failing on its commitment to protect access to cash for people in remote and rural areas who need it most.“The regulator was warned that these changes to the ATM network could have severe consequences for communities, businesses and millions of people who rely on cash, yet it waved them through without proper scrutiny.
Update: 3 October 2018
Our new research has revealed that lower-income households and older generations will be hit hardest by bank branch and ATM closures, with these groups using cash more frequently than average.
The group perhaps most at risk of social exclusion when bank branches and ATMs disappear is the over-65s – 80% are reliant on cash, using it at least two to three times a week.