In the past two years, British banks have shut down 1,203 branches and 8,700 free-to-use ATMS according to Which. Link, the ATM network operator, has also lowered the ATM interchange fees from 25 p per transaction to 22.5 p between July 2018 and early 2019. Following calls for government regulation by consumer rights groups and public uproar, Link has decided to back off from the last two 5% tranches scheduled for 2020 and 2021. The ATM interchange feeA fee paid between banks for the acceptance of card-based transactions. For instance, a merchant’s bank (acquiring bank) will pay an interchange fee to the cardholder’s bank (issuing bank) when the latter makes a transaction. This is also the case when a cardholder uses an ATM: the cardholder’s bank pays a fee to the ATM operator. More is the fee the cardholder’s bank pays to the ATM operator.
The lowering of the fees has rendered numerous ATM unprofitable. The operators have opted to either shut down the machine or to charge the consumer a transaction fee – surcharging.
Today, a 15,277 ATMs charge fees in the UK, a quarter of the network.
According to Which, the reduction in interchange fees has saved banks £120 million as the fees paid have dropped from £686 in 2017 to £564 million in 2019. On the other hand, fees paid by consumers have risen by 39% and amount to £104 million in 2019.
It’s a tax on the most vulnerable in society
Which stresses that the poor and remote communities are more affected by these changes. “Between January 2018 and September 2019, 1,000 formerly free-to-use cashMoney in physical form such as banknotes and coins. More machines in the UK’s most deprived areas started charging for use (6% of cash machines in these areas), compared with 237 (4%) in the most affluent areas.” according to research. For Natalie Ceeney, Head of the Access To Cash Review: ‘The startling fact that a quarter of all ATMs now charge consumers to access their own moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More should worry us. It’s a tax on the most vulnerable in society.’
In October 2019, LINK, announced the launch of a new Community Access to Cash Delivery Fund so consumers can request a free ATM when it’s needed. Local communities apply through their MP, local council or request help directly from LINK. The criteria to access the funding include distance to nearest free ATM, availability of a Post Office, site security and that there is a suitable location. LINK will fund the new ATM directly. By December, over 2,700 requests had been received.