Recent Which? research has identified more than 200 communities in Britain with poor ATM provision, or no cash machines at all. This makes our call for the Payments Systems Regulator to conduct an independent review of free-to-use cashpoints all the more urgent.
Back in November, we asked you whether we’re heading for a cashpoint crisis after Link, the UK’s largest cash machine network, announced that it was reviewing its interchange fees.
Its proposal to cut the fees – usually around 25p per cash withdrawal – by 20% over the next four years would seriously impact the profitability on running free-to-use cashpoints. The end result being that we face a real possibility of providers removing many free-to-use cashpoints or making up the loss by charging you to withdraw money.
Our latest analysis of Link’s own data on 70,000 cashpoints found that 123 postcode districts – with a combined population of 110,935 – did not appear to contain a single cashpoint, making many consumers reliant on access in nearby villages or towns. A further 116 postcode districts appear to have just one cashpoint, 37 of which charge a fee.
When we first discussed Link’s plans to cut its fees on Which? Conversation in November, many of you shared your concerns about it and told us what impact closing cashpoints would have on you.
‘I live alone in rural Wales and am severely disabled. We have lost our NatWest bank in Monmouth and in June will lose a branch in Chepstow. Cashpoints are few and far between. I have to rely on a Tesco cashpoint where I can still obtain cash and park right in front of it. I pay my carers in cash, and also the milkman. I also need cash to pay my landlord for the electric I use.’
While Roger said:
‘I don’t have a debit or credit card due to the cash they require each month to be free. I only get a basic pension and don’t have enough going in to avoid this charge. So a cashpoint is essential for me locally or it would mean a 20-26 mile round trip to the nearest town/city to draw out money.’
Others, like S Marsh, were outraged at the prospect of having to pay to get at their money:
‘It’s my money! I will not pay to withdraw my money. Banks are closing so getting money from the bank itself is getting more difficult. Therefore we need cashpoints. We need cash to pay tips and make sure it goes to the person that served us. We need cash to buy things that we don’t want on the bank statement. It’s called right to privacy. Cash for when the card is lost. Cash to give as presents. Cash for small amounts. Cash for tourists who are charged a transaction fee when using their card. It’s my cash. Your cash. Not the bank’s.’
Meanwhile, Ian pointed out that many small businesses rely on cash:
‘There are still many small businesses who rely on cash entirely, as they have no way of taking money otherwise. The erosion of cash-providing facilities will eventually strike home with us. Small and local businesses often have restrictions on the lowest figure for which they will accept a card payment [so you need cash to pay them] 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.’
With your worries in mind, we wrote to the Payments System Regulator (PSR) to call for an urgent independent review of free-to-use cashpoints.
We want the needs of consumers to be put first, rather than pressure from some banks to cut costs, and discourage use of cash, leading to a situation where accessing cash becomes a problem.
We want the PSR’s review to fully evaluate the impact that these changes could have on consumers, millions of whom rely on the free-to-use network to access cash, including looking at alternative options for protecting consumers.
Update: 31 January 2018
Link will go ahead with its proposals to reduce the interchange rate for ATMs. The fee will be reduced from 25p to 20p per withdrawal.
Back in November, we shared Link’s proposals with you, along with our concerns that the proposals could see the closure of free-to-use cashpoints. The trade body for ATMs (ATM Industry Association) has warned today that these plans would see as many as 30,000 free-to-use cashpoints disappear.
The fee change will ultimately make cashpoints less profitable to run, as it will cut the fee operators receive from banks. The cut will be phased over four years, with the first fee reduction coming into effect in July 2018.
Link has, however, suggested incentives to encourage ATM operators to maintain access to cashpoints in rural and less affluent areas. Under Link’s plans, a subsidy of 10p per withdrawal will be tripled to 30p for cashpoints in areas with reduced access to cash.
While Link is claiming it wants to maintain free access to cash, we’re concerned about its ability to do so, not least when it’s facing a clear threat from banks to leave the network.
Since November, we’ve heard from hundreds of people from all over the UK about their current struggles to access their own cash. Link’s plans now pose a greater threat towards those cashpoint-desert communities. But what’s more concerning is that its proposals appear to have simply been waved through without a thorough public consultation.
With over two million consumers in the UK reliant almost entirely on cash, we believe it’s vital that the Payment Systems Regulator conducts an urgent market review.
How much do you depend on cashpoints? Have you noticed fewer machines in your area? Could the closure of several cashpoints across the country now lead to banks closing even more in the future?