/ Money

Are we heading for a cashpoint crisis?

cashpoint

We’ve become used to the sight of bank branches slowly disappearing from the high street. Now could it be the turn of the free cashpoint?

There are over 70,000 cash machines in the UK, almost double the number there were 16 years ago, and over 53,000 of them are free to use.

But with cashpoint use apparently falling and plans to cut the fees they receive from banks, the ATM industry body is warning that some 10,000 free cashpoints could disappear from Britain’s high streets within four years.

Why could this happen?

Each time you take out cash, the ATM operator charges your card provider a small fee. But Link, the UK’s cash machine network, whose members include all the main debit card providers (your bank), is proposing to cut these fees by 20% over the next four years.

This could mean that some ATMs will either pass on the loss by charging customers to take out cash – as those machines you see in some convenience stores, railway stations and motorway services do – or disappear altogether.

Link’s chief executive, John Howells, has tried to provide reassurance, saying: ‘Extensive free access to cash is vital for consumers and we intend to maintain this for many years to come.’

Campaigning

From as far back as 2005, we’ve campaigned for everyone to be able to conveniently access and manage their own money without paying a charge.

That doesn’t mean that all ATMs should be free – you can have the choice of paying to use a convenient ATM, such as in a shop, but you shouldn’t have to go to unreasonable lengths, such as travelling a long distance, to take out money for free.

And being able to easily access your money without being charged is a subject that’s very close to your hearts, too. When the Royal Bank of Scotland and Natwest stopped allowing basic bank account holders to use rivals’ ATMs, our community reacted with anger.

John said:

‘This is just plain stupid. I’ve just come out of hospital and can’t drive. The cash machine that is a two-minute walk down the road now can not be used, so now my local cashpoint is two miles’ away.’

Sharon had a similar issue:

‘I live in a rural area of Cornwall and do not drive, and there are only two cashpoints five miles apart. It has become harder for me to get my money out, especially since the cash point has been out of order on several occasions.’

And our last convo on fee-charging ATMs also sparked some thoughtful debate, with Rwth expressing disgust at being charged to take out money:

‘I have always been very disgusted by fee charging ATMs and refuse to use them. For many years, I have managed without cash in many situations, and only carry small amounts at any one time. If possible, I pay with a credit or debit card. Some people just don’t have the opportunity to do without cash for transactions. I feel very sorry for their predicament.’

Meanwhile, malcolm r wondered how many people live more than 1km from their nearest cash machine, and others suggested cashback as an alternative.

Cash vs cashless

I, for one, avoid fee-charging ATMs, but I do still withdraw money from those that are free to use about twice a week, as I prefer to pay by cash to help me manage my budget. If having 10,000 fewer ATMs on the high street meant there wasn’t a free-to-use cashpoint near me when I needed it, I know I’d be livid about having to pay £1.50 or more every time I wanted to take out cash.

I accept that there’s been a growth in contactless payments, and cash machine withdrawals in general are declining. But we’re far from being a cashless society, and many people still rely on cash as their main, if not only, payment method.

Do you rely on your nearest ATM or do you pay for everything by contactless payment? Have you noticed ATMs disappearing from the high street already? What do you make of the proposals? Are banks simply trying to protect their profits, or are ATMs a relic of a different era?

Comments

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I still need cash for minor purchases, to use a shopping trolley, to give as a tip, buy a poppy, to get a raffle ticket at a local charity event, and so on. I use free ATM’s from time to time to replenish my notes. It would be inconvenient if they were taken away. I occasionally get cash at the supermarket checkout but the staff do not ask anymore so I have to remember. I would expect all the ATM’s outside banks and building societies and at supermarkets to remain, however.

I see the free cash withdrawal facility as an essential part of the banking service. I think we are heading in the direction of a contactless and cashless economy but given that there a few things for which there is no simple substitute at the moment I think we shall get to 95% in due course and then the rate of progress will slow down considerably. I cannot imagine a time when I shall not have a pocket full of coins and a wallet with a useful quantity of notes. As much as anything it’s for reassurance mainly.

Interesting topic. I never carry cash at all, but when we go away we do need it for tips, charity donations and so on, so it’s fortunate my wife has a large handbag. On a more serious note, however, there are still many small businesses who rely on cash entirely, as they have no way of taking cash otherwise. Small and local businesses often have restrictions on the lowest figure for which they will accept a card payment and giving a small donation to collectors at supermarkets could be made impossible. Cash is also useful for paying for small jobs to be done, so the erosion of the cash-providing facilities will eventually strike home with us, certainly.

I use a card whenever possible (even Poundland accepts cards for a £1 purchase) but I find I need some cash (not a lot but some) I go into my bank and withdraw a small amount in £5 notes and £1 coins I have had the same £5 notes in my wallet for 2 or 3 months now ( never had the need to use them ) but£1 coins seem to go quickly A few smaller coins are needed for place you have to pay a small charge to get in (public toilets for example most on bus stations charge ) Some cash will always but needed for some years yet until you can use your card for everything you have to pay for .But when will that happen?? never maybe!

Banks have no inerest in your needs – only their profit – there is no other consideration. They will of course deny this. Don’t forget companies (including banks) exist to make profits for their shareholders : & who are they? The big financial services companies who pay your pensions!

I don’t have to use much cash these days and can use the ATMs at Morrisons and Tesco when I’m shopping. The first time I tried to use the small (free) ATM in the village shop (1.3 miles away) it was empty, so I’m not going to rely on it and will go when the Post Office counter is open.

I do use cash in the village shop. I suspect they would take cards, though cash is the normal means of payment used by customers. Neither the two pubs I frequent infrequently take cards and one has a sign to that effect. I use cash on the park & ride buses. I used to use cash on the local buses but now have an card for free travel. I have never needed a coin to unlock a shopping trolley in this region. I know that Lidl does use them but I don’t buy more than one or two items there. I rarely need to pay for parking, but have only every paid with cash.

Thankfully all the ATMs that charge a fee are clearly marked, and I have avoided using them.

I will be paying for two Christmas meals with cash. They are events run by charities I work for and neither has facilities for simple electronic payment. In one case I could do a bank transfer and send an email to our treasurer to explain that I’ve done this, but it’s easier just to pay the event organiser with cash or a cheque.

Seems to me you use quite a bit of cash, wavechage – village shop. pub, park and ride, eating out, parking….. :-). I use it for the sport we play, raffles, lottery, and small purchases. Do be careful with the new notes when they are fresh from the ATM – they seem to stick together. A friend of mine crumples each one before putting it in his wallet.

We have to be careful talking about the new £10 notes. Some people haven’t seen any of the old ones yet.

They remind me of 10/- (shilling) notes. Probably worth about the same. When I was little we were in a shoe shop and my parents saw someone produce a £5 note – a large white one about A5 size. It caused quite a stir in times of real austerity.

I have no real wish to use cash, Malcolm. I’m now comfortable with contactless cards, having not seen any unexpected payments from my account. Cash and cheques are still vital for charities because the equipment to take card or phone payments is expensive, so the charities I’m involved with are happy to take cash and cheques. It’s a hassle. We do advertise Just Giving phone payments but very few use the service.

Cash is so versatile, Richard. I keep a couple of notes in my back pocket in case I accidentally go out without my wallet, as I did recently. It allowed me to pay a bus fare and have something to eat and drink. Of course cash would be no help if I wanted to catch a bus in London. 🙁

I keep a small amount of cash – change and a note – in the cars for parking or an unexpected purchase if I’ve forgotten my wallet. A folded up £20 note in a separate place in each of my wallets and car key holder provides for an emergency – to be replaced as soon as used.

Exactly as I do. Carrying some cash is essential.

Another thought ! Debit cards are fine you need to have money in you account to use them Credit cards will only if not used sensibly only get you into debt

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However – if used sensibly – Credit Cards do have some advantages – including additional consumer rights (under UK law) and free short-term borrowing.

I am opposed to credit card companies raising credit card limits unless the increase has been requested by the customer.

They certainly should change the name of credit cards to “debt cards” and call debit cards “spending cards”.

There is an argument for saying the banks should not issue credit cards to people on low incomes, or alternatively set very low credit limits.

I don’t think I have read the report. I protect myself from credit card charges by having direct debits to pay off the balances on my two cards each month.

I do think credit card companies should set an upper credit limit but let customers set their own limits within that limit.

I have a £9000 credit limit on one card but rarely spend more than a couple of hundred pounds on it. I would probably set my limit at £300 but temporarily increase it on the odd occasion I had a larger purchase.

This would help prevent misuse of a card.

I agree alfa. We, too, have had very odd occasions when we made a large purchase on our credit card. But we do pay it off monthly in full – it is just a convenience.

It was suggested earlier that the card companies should be much more careful about who they give cards to, and in the amount they allow to be “borrowed”.

Off topic, but how do we stop people gambling their lives away – probably 100 times worse than having an unarranged overdraft or maxed-out credit cards. Bet365 CEO paid herself £212 million last year. The company’s revenue was nearly 5% of £57 billion in bets placed.

Small amounts of cash will always be needed, I for example find it a good way of avoiding vat when paying small service bills etc. [I hope Paradise Papers do not find out].

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I have very little sympathy for those who are embarrassed by the revelations from the Paradise Papers. If they didn’t l know they were using offshore enterprises to move their money around then they should have done. The only reason to place funds offshore is to gain some tax advantage. It annoys me that the UK tax authorities have been very lax and supine through all this and allowed these tax dodges – all perfectly legal under the present rules, of course – to proliferate.

Kel – Very small businesses are exempt from VAT – the turnover threshold is £85,000 a year and there are many offsets. What you are doing is aiding and abetting the avoidance of income tax. Not recommended, because if the trader gets his collar felt he has the right to name you as an accessory.

Try the LLP on for size. One of the biggest mistakes (or was it??) the Government of the day made. Regularly discussed in Private Eye.

Greytech says:
18 November 2017

Actually it is tax evasion, which is a criminal offence. An example of tax avoidance in the small business environment would be when a tradesman is not registered for VAT and wants to keep below the threshold he will encourage you to buy all the materials. You will pay the VAT on them and he doesn’t have to charge you VAT on his labour. That is legitimate avoidance of VAT. He still needs to declare your payment to him and keep under the VAT threshold.

Should cash machines – ATMs be free? They are not, of course. They cost money to install and to service, so customers will end up paying one way or another. Banking is not “free” even if you do not get a direct charge.

I think it is fair to pay for a bank’s services directly, rather than have them make a charge in other ways (low interest rates for example). For an ATM, £1.50 seems excessive; I’d put up with 50p. If we were all charged for how much use we made of the bank – whether ATMs, cheques, paper statements, withdrawals and deposits, DDrs, but rewarded with (better) interest on all deposits and more realistic charges for overdrafts for example, then I think it would be fairer for all – the more you use the bank, the more you contribute to the costs.

Charging for banking services is what I have been suggesting for a long time, Malcolm. In my view, the main reason for doing this is to be able to cut interest rates so that those in debt are not paying for our free banking. Interest on credit balances could be used to help offset charges for banking services.

It would be interesting to know how much it costs to provide ATM services. So far I have managed to avoid them.

Not sure your maths add up, Malcolm. You say “They cost money to install and to service” and of course they do, but they also save massive amounts of money by saving on staff wages, buildings, heating, insurance, training, time – the list is pretty endless. In fact, let’s be honest about this: the banks didn’t install cash machines for philanthropic motives. They did it to save money, and save money they have – in spades. At a stroke they’ve saved on everything listed, plus council taxes, business rates and maintenance. In return for what? A few thousand mass-produced automated safes fitted with PCs running a version of XP. So in terms of costs, the banks are laughing all the way to the – er, bank.

No, the banks make money out of minding our cash and lending it out at much higher interest rates than they pay us to leave it with them. They’re still making profits that put small countries to shame and their unashamed push to remove the inconvenience of having to handle cash at all should be resisted at every opportunity. We owe the banks nothing – but they owe us a lot.

I simply said they cost money to install and service – they do. The fact that they save the banks money is irrelevant to the argument. It just means their costs are less and their charges should be low for an ATM withdrawal, not that there should be no charge. It is simply about how their charges are split among users and recovered. So how much should an ATM transaction cost?

I don’t think it’s irrelevant when the thrust of your argument was that there’s no such thing as free banking. What I’m saying is that as long as the banks actually have our money, give us far less interest than they charge from loaning that same money out, slash staff and buildings and continue to make substantial profits the very least they can do is make it free to retrieve our money. They’re making money on the back of our money. Charging us for getting that money back is pushing their luck.

The point you miss is that I suggested they increase the interest as well as charge for services. See the last lines of my earlier post.

Not sure which post that was, but I suspect the point I was making remains valid: the banks are adept at making money hand over fist and are extremely reluctant to share any of it with the customers who make it possible.

I agree with Ian, the Senior Executives of all Banks are overpaid with inflated salaries, receive excessive bonuses and expenses, and in most cases only working 2 or 3 days a week.

Greytech says:
18 November 2017

Banking in the UK generally does not make direct charges for its services unlike most other countries. It charges indirectly with the difference between lending and savings interest rates, and charges to traders for customers using credit or debit cards, plus all the penalty charges it makes to those who fail to manage their money. I agree with Malcolm r that £1.50 is an excessive charge but they are always by ATMs that are not owned by banks they are independent ATM owners sometimes the supermarkets or petrol station owners.

A different cash-point crisis is when the machine fails to pay out cash or return the card. It has not happened to me, though I have had to wait longer than usual and often been deprived of a receipt. Here is a sad tale: https://www.theguardian.com/money/2013/sep/07/atm-swallows-500-bank-refuses-investigate

The cashless society isn’t here yet and maybe never will be fully, although I disagree with those who say that paying by BACS transfer is troublesome. When eating out with friends, I usually pay on a card and the others BACS me whilst we are still seated. Simple, fast and far from being a hassle.

I am also a little confused by the various comments listing cash as a requirement (eg. supermarket trolleys, remembrance poppies, parking meters, etc.). These are usually cash transactions but (generally) involve coins rather than notes and so are not dispensed from ATMs, which I thought was the thread here.

Perhaps of more import is the fact that not only do ATMs not dispence coins, increasing numbers of them also seldom dispense anything less than a £20 note.

Coins still have to be obtained – usually by changing a note, by ‘cashback’ at a till, or a bank.
Just requesting cash change at a shop counter without purchasing anything is extremely difficult.
The cashless society will not be with us until ALL transactions are electronic.

Lynda Keedwell says:
18 November 2017

Its the Banks running the country again. They want all the profits without providing the services. It is our money they are using. I have already lost my local bank branch in my town with its ATM. However there are other ATM’s free to use but I have to pay the occasional cheque into the Post Office.
I have little time or respect for the banking sector since the 2008 debacle. They have no consideration or loyalty to their customers, its all about profits for themselves.

Bob Davies says:
18 November 2017

Parking, Food, Bus, Trains even a taxi has taken contactless payment from me, I think its great. I can even pay my employer in a subsidized restaurant at work for lunch each day with Apple pay. so no I don’t use cash very often. I don’t expect my son to use any when he grows up. But like most fast technology changes we need to support the older generation that are not able to keep up with this new way of paying. Could all post offices provide free cash access for people who need it? Maybe all banks should contribute to this running cost.

This is a rather condescending post. There are plenty of small businesses who do not take credit cards as the overheads eat into their profits that lessen every day as people shop on the internet. Many others begrudgingly accept them and would much rather be paid in cash.

I am fed up with the constant patronising references to the older generation being incapable of doing anything modern, struggling with their computers and other devices, not being able to cross the road without a boy scout in attendance, and being generally inadequate. I don’t think society has to make that many compromises to adapt to their needs.

On behalf of the older generation I should like to remind people that we have not all lost our marbles, do know where we are going and how to get there, can read and write and do our sums, can survive for more than a few hours without making a phone call or going to the toilet, and seem to have a firmer grip on reality than the younger generation.

Well said John, thumbs up from me, but I would like to add the age acquired blessings of wisdom and a sense of good humour to the list, and to paraphrase a quotation reputed to have been written by a nun who made the assertion that a “sour old person is one of the crowning works of the devil”……….and let’s not forget the little old lady who proclaims to have no enemies at all because she has “outlived all the b*****ds” 🙂 🙂 🙂

As I’ve said before, cash remains vital for charities. Our small society does walks and other outings for the public and out in the country, the ways of accepting donations is limited. Contactless solutions are being developed but the cost of the equipment is prohibitive. The industry tried to get rid of cheques a few years ago but they still have uses, and are again important for charities.

Let’s get rid of the idea that business should be run exclusively to suit the needs of companies and the wishes of the shareholders and think about the needs of consumers. It’s still possible to run a successful business if you do.

The trouble with patronising folk like you, is, you don’t know how much, you don’t know! I’m sure you will learn to be more diplomatic with the benefit of age.
P.S. Mind you don’t fall over the bucket! LOL

margaret says:
18 November 2017

I had my card and PIN number stolen drawing out cash from a bank on the street. Now I only ever draw cash out inside a shop. There is only one of these in my local area.

I only use any cash point as last resort going into my bank to get the cash I need and plan how much beforehand not wait until I have none left and have to go to the nearest cashpoint Those who pay to withdraw their own money must be stupid or something Try to plan ahead if possible as regards cash you need

We lost our village post office many years ago. The part-time RBS branch in the nearest large village (2 miles away) closed a few years back, and now the RBS in the county town has closed. My access to cash is 1) walk, take a bus or drive over a mile to a farm shop which has a free to use cash machine inside the shop; 2) walk or drive over 2 miles to the nearest large village (no direct bus route, no street lighting or pavements for most of the route) to use one of two free cash points provided by stores or 3) drive or bus to county town 4 miles away where there are still some banks and some supermarkets that do cash back. My husband runs a small business whose clientele are unlikely to use online payments or bank transfer so he now has a once a week very short window to use RBS mobile banking in the county town to pay in cheques – or we can do a 30 mile round trip to the nearest branch. So we’re spending more and our and the banks’ carbon footprint is getting bigger. Progress? Don’t think so.

In your and your husband’s position I would post cheques to the bank for paying in [or wait until shopping day in your county town], ask some of your customers to pay all or part of their bills in cash, take advantage of cash-back when shopping at the supermarkets, and draw enough out when you are at a bank to cover your cash needs for a couple of weeks ahead. Given the decline of your village there do not seem to be many opportunities to spend cash there anyway so a modest amount should last some time.

No mention of disabilities. As a registered disabled person and 87 years old, the length I can walk is limited. Any general reduction in the number of easily accessible ATMs will affect me considerably.
John

I take money out of a cash machine every week so I can budget how much I am spending. I find it far to easy to over spend by just using my debit card. I do use my debit card for larger amounts.

Shugg says:
20 November 2017

I take out £50 every couple of days for things like pub, small shops & bus fares. I will not pay to take my own money out.

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This seems to be more about opposition (from Germany) to a European Central Bank supporting individual countries’ banks, rather than countries taking responsibility for their own banks, as now. It does nor seem to be to do with removing the guarantee.

When I leave any money in my bank account it remains my money and I can get it out whenever I want. It is certainly not the bank’s money. While they are looking after it for me I am quite happy for them to use the money for lending or investment because this helps to keep the cost of banking down and provides liquidity for the economy. The banks and major building societies are required to maintain substantial reserve and liquidity ratios to ensure they can meet demands for repayment.

The UK’s Financial Services Compensation Scheme provides a range of protections for different aspects of the financial services sector, the most well-known one of which covers the first £85,000 per person per firm in the event of the failure of a banking firm. There has been plenty of publicity about this following one or two high-profile collapses and those savers with higher amounts of money at risk are advised to spread their savings and investments among different businesses. There is no risk of default on funds in National Savings and Investments, and those with less than £85,000 in one institution [or group] are not at any risk as the compensation scheme will make good any shortfall. The financial limit has been restored to £85,000 after having been lowered for a period to £75,000 in response to £/€ exchange rate adjustments.

People should be reassured that their personal savings and investments are not at risk if they follow the advice given and make sensible money-management decisions. The UK government has the right to retain the FSCS in the event of any changes proposed by the European Central Bank which, so far I can see, is not proposing to weaken the UK’s depositor protection arrangements but to reinforce such schemes where applicable in other jurisdictions with insurance-backed schemes.

Despite searching, the only thing I can find to confirm Duncan’s comment re- the ECB is from a well known, unreliable and alarmist rag that is known mainly for its pro-Russian and extremist views.

The 1st ATMs appeared from the 60s onwards. Eventually there were enough of them for the banks to encourage you to use them as it would relieve the pressure off of the counter staff and allow non cash transactions to be completed faster. The banks then complain that the counters are not being used enough as everyone is using the ATMs so they close the branch. Now customers are being encouraged to used tap and go and other non-cash means. In the not too distant future ATMs will close due to”under useage”.

Kevin Sibly says:
22 November 2017

If free ATMs continue to disappear I will draw all my money out of the bank each month as soon as it goes in, leaving only enough to pay direct debits. So the banks may save on he ATMs but lose out not having my money at their disposal

Crystal says:
9 December 2017

This is what they said they would do to control the population and not allow freedom for the British public. Banks have no interest in your needs – only their profit and shareholders, they want to monitor what you spend your money on nothing more nothing less. What about the carers who look after disabled people who are not allowed the person’s card to go shopping…. Contactless is dangerous I was in M&S and about to take my card out of my purse to pay when a gentleman stretched over to pick something up with his contactless card in his hand and it swept by the machine where my transaction was taking place and it put my transaction on his card, I had to go to an ATM to get cash out to pay him – I have since taken contactless off my cards with my banks and made it just a chip and PIN card which people do not realise you can do. The Banks are all out for themselves. To make us a cashless society would be discrimination to all the British population, people are not awake they are asleep to what goes on in the UK, very sad that it is their children’s future they are playing with