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Payment Systems Regulator warns LINK as ATM closures continue

ATM network LINK has been warned that if it does not meet existing ATM geographic spread requirements the Payments Systems Regulator (PSR) will intervene.

LINK is required to maintain the current geographic spread of ATMs and to protect free-to-use ATMs that are more than 1km from another free-to-use machine, but LINK is currently reducing its network as non-cash payments grow in popularity.

Between December 2017 and May 2018, LINK reported that 500-plus ATMs were closed each month. Some 85% of them were pay-to-use, where consumers are charged to withdraw money, according to the PSR.

“We are protecting the geographic spread of free-to-use ATMs and it is essential that we see free-to-use ATMs remain available to everyone,” the PSR said.

“We have seen no evidence that protected ATMs are closing, but if people have evidence that suggests this is not the case, we want to hear about it.”

LINK said at the end of 2017 that it was reducing its interchange fee by 20% over the next few years, which could make a growing number of free cash machines no longer financially viable to operate.

Earlier this week in Parliament, the Association of Convenience Stores called on LINK to be transparent about the application of its Financial Inclusion Programme and the impact of the interchange fee cut on rural ATMs.

The evidence session of the All Party Parliamentary Small Shops Group focused on the challenges facing free-to-use ATM operators in light of LINK’s current strategy.

During the session, LINK confirmed it will provide monthly reports to the PSR on the number of free-to-use ATMs that are further than 1km from the next closest free-to-use ATM, as well as regular updates on the network's overall strategy.

ACS CEO James Lowman said: “Cash machines in convenience stores are an essential service for the millions of consumers that rely on cash, as well as other local small businesses and market stalls that don’t have card payment facilities.

“LINK’s decision to press ahead with cuts to interchange fees is already leading to retailers having to make difficult decisions about the future of their cash machines, potentially leaving rural and isolated communities without access to cash.”

He added: “Retailers cannot be expected to subsidise the network, especially when the big banks, who are profiting from the interchange fee cut, are closing branches in their thousands and abandoning consumers across the UK.”

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