Author Lauren Howells

Proposals put forward by the board of Link could mean that the future of hundreds of free-to-use cash machines could be under threat, the Guardian reported this week.

Link network could reportedly be overhauled

The network of 70,000 Link ATMs, 55,000 of which are free-to-use, could reportedly be overhauled, following a dispute reported in January this year concerning the fees that are charged by Link members to other Link members in order to use cash machines.

These proposals, which could reduce the availability of free cash withdrawals, could affect vulnerable customers. Back in August, Reuters reported that banks in Britain were set to close a record 762 branches in 2017, partly as a way to cut costs by moving more business online.

Link members include high street banks such as Barclays, Halifax and the Bank of Scotland.

Number of free-to-use cash machines could reduce

The chief executive of Link, John Howells, reportedly said that although the amount of free-to-use ATMs could reduce, customers on low incomes would be provided with protections and that there would not be areas of the UK that were left with no cash machines.

The Guardian has said that the plans, which were reportedly drafted due to a working group set up after January’s row not coming to an agreement, will be sent over to the members of Link on Wednesday.

Proposals reportedly relate to interchange fees

Nenyedi at the English language Wikipedia [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

The proposals reportedly relate to what are known as interchange fees. When customers take out cash from the machines, the interchange fee is what card issuers pay to other card issuers.

The Guardian says that this fee is around 25p at the moment.

Each time customers use an ATM, their card issuer will pay a fee to the ATM operator.

This means that the big banks and building societies, with lots of customers, are paying what the Guardian describes as “big bills” to keep those cash machines free to use for customers.

Cash still accounts for 40% of all payments in UK

According to an article published in the Financial Times in June this year, the demand for cash is still growing in the UK, with the Bank of England saying the value of notes in circulation rose by 10% in 2016 and cash still accounting for 40% of all payments in the UK. This is compared to 62% back in 2006.

However, figures from UK Finance show that the proportion of all payments in the UK made using cash is expected to fall to 21% by 2026.

Mr. Howells reportedly told the Guardian that although there were 5,000 more ATMs now than there were three years ago, consumers choosing to pay with cash is falling.

The Link network reportedly costs £1 billion a year to run.

Earlier this year, Link launched a free ATM locator app which shows the location of all 70,000 Link ATMs, which it described as “effectively every cash machine in the UK”.