Thousands of free ATMs in small towns may be threatened with closure due to innovations, which became known recently.
At the moment, bank customers can use ATMs of competitive institutions to withdraw cash at no additional cost for this service. Accordingly, those banks and building societies, which have more customers, pay more so that the service remains free. For this reason, financial institutions put pressure on Link (the company managing most ATMs in the UK) to reduce the commission for using ATMs, but experts fear that this is an imperfect solution.
Today, Link has announced its decision to reduce the commission, paid by banks and building societies, from 25 pence to 20 pence per transaction. The company also promised that free ATMs located 1 km away from the nearest free machine will not be closed.
But experts fear that the new system will prove inefficient and lead to the closure of thousands of ATMs. Ron Delnevo, executive director of the ATM Industry Association, told the BBC that 30,000 machines could be closed. He added: "The loss of any of them will be terrible, but if the innovation comes into force, 25-30 thousand ATMs will stop working."
Consumer Protection Group ‘Which?’ recently discovered that in the UK there are more than 200 regions in which access to ATMs is poor or absent altogether. In addition, three quarters of hospitals with paid ATMs do not have free alternatives.
Gareth Shaw, financial expert of ‘Which?’, explained: "Although Link says it wants to keep free access to cash, we do not believe that the company will succeed, especially now that it is being pressured by banks. Despite Link's innovation, the number of free machines in the UK may decrease, which will have a negative impact on clients. We are concerned that such decisions are taken without discussion with the public. As there are more than 2 million residents in the country that almost entirely depend on cash, it is important that Payment Systems Regulator conducted its own investigation. "
Mark Boleat from Link said that the decisions taken will not affect the geographical location of ATMs. He said: "The members of the board decided to lower the commission for using ATMs that banks pay to a level that will allow maintaining a sufficient number of free ATMs, especially in rural and remote areas, but at the same time help to avoid the appearance of new ATMs in those places, where they are no longer needed, which we have observed in recent years."
The Payment Systems Regulator reacted approvingly to the news, but noted that it would monitor the consequences of the innovation. Hannah Nixon, representative of the Regulator, said: "We will intervene if we consider that the innovation will affect the geographical location of the ATMs."