Cash Dispensing: Fees and Charges

Treasury written question – answered on 4th November 2019.

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Photo of Tom Brake Tom Brake Liberal Democrat Spokesperson (Exiting the European Union), Liberal Democrat Spokesperson (Duchy of Lancaster)

To ask the Chancellor of the Exchequer, what assessment he has made of the effect of interchange fee reductions on the number of free-to-use ATMs.

Photo of Tom Brake Tom Brake Liberal Democrat Spokesperson (Exiting the European Union), Liberal Democrat Spokesperson (Duchy of Lancaster)

To ask the Chancellor of the Exchequer, what assessment he has made of the effect of interchange fee reductions on the number of free-to-use ATMs.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government has not carried out a formal assessment of the effect of interchange fee reductions on the number of free-to-use ATMs.

Although the management and deployment of ATMs is a commercial matter for ATM market participants, the Government recognises that widespread access to cash remains extremely important to the day-to-day lives of many consumers and businesses in the UK.

The number of free-to-use ATMs increased for over a decade up to 2017, with the majority of ATMs clustered in areas of high demand and footfall. LINK, the scheme that runs the UK’s ATM network, saw this situation as unsustainable. Therefore, in January 2018, LINK announced reductions to the interchange fee, while taking steps to preserve the broad geographic spread of free-to-use ATMs. This included protections for remote free-to-use ATMs, one kilometre or further from the next nearest free-to-use ATM or Post Office.

In July 2018, LINK responded to lower transaction volumes at ATMs by cancelling the third reduction of interchange fees due in January 2020 and putting on hold the 4th reduction that was due in January 2021.

More recently, LINK committed to protecting free access to cash on high streets – where there are five or more qualifying retailers – and announced £1 million to fund requests for new ATMs from local areas with poor access to cash. Furthermore, UK Finance – the trade association for the UK banking and financial services sector – has launched a Community Access to Cash Initiative, offering grants to local communities to improve cash access.

As of June 2019, there were 48,500 free-to-use ATMs in the UK, which represented 78% of the total number of ATMs. This remains 21% higher than a decade ago.

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