More than 250 free cash machines are disappearing a month as operators shut unprofitable ones, with network watchdog the Payments Systems Regulator admitting it is struggling to cope with how many Link are closing.
The closures – 76 of which have comes in previously protected rural areas – have left some areas completely cut off from cash.
The rush towards a cashless society reliant only on online banking means the number of free machines – around 53,000 at the start of the year – is being cut down at record rates.
ATMs no longer profitable
The ATM Footprint Report released by Link – who manage the entire ATM network in the UK – found that 1,300 cash machines were lost in the period from January 2018 to the end of July.
Part of this is down to the popularity of apps like Paypal or Apple Pay, but it’s also because cash machine operators such as Cardtronics and Note Machine are deciding that ATMs in certain places are not worth investing in, even though they get 25p from banks for every transaction customers make.
Cardtronics, a US firm, made pre-tax profits of £46m in the UK in 2016, while Notemachine made £14.7m during the same period. Under pressure from banks, Link is hoping to cut this fee to 20p to help banks.
The Payment Systems Regulator (PSR) has now stepped in and asked for protection of the geographical spread of free-to-use ATMs across the UK. Hannah Nixon, the PSR’s managing director, says, “Free-to-use ATMs continue to play a vital role in helping people access their money.”
Rural communities left cashless
Plans to cut the funding to free-to-use cashpoints has hit rural areas the hardest
Link claimed it had put in safeguards to ensure there is not a gap further than 1km between each free-to-use cash machine, with the organisation earmarking some 2,365 free machines in remote and rural areas that it hoped to save. However, some 76 of these protected cash machines closed between January and July, with more than twenty of them not even having a Post Office or bank branch nearby to get cash from.
The PSR says it is taking action to ensure Link meets its commitments but admitted this was, “a major test of a relatively new regulator.” They then called on banks, the ATM providers like Cashlink and Notemachine, to remember their duty to ensure consumers don’t lose out.
ATM action could be “too little, too late.”
Link and PSR have again made plans to save similar ATMs but Chair of the Treasury Committee Nicky Morgan has called this, “too little, too late.” She added that the PSR must ensure that Link is held to its commitment to maintain the broad geographic spread of free-to-use ATMs.
Jenni Allen, Managing Director of Which? Money, says the rate at which free-to-use cashpoints are closing is alarming with the regulator and Link failing in its duty of care to consumers. “It is clear that Link is failing on its commitment to protect access to cash for people in remote and rural areas who need it most.”The regulator was warned that these changes to the ATM network could have severe consequences for communities, businesses and millions of people who rely on cash, yet it waved them through without proper scrutiny.””The PSR must now urgently intervene to stop further closures and ensure that no more consumers are suddenly stripped of their access to cash.”