Treasury Select Committee chair Nicky Morgan MP has raised concerns about the future of the UK’s cash machine network in response to comments from LINK Chair Sir Mark Boleat.
Reassurances were sought by Nicky Morgan after a consultation was published by LINK in November, proposing to reduce the level of interchange rates (the fee paid by card issuers to ATM operators) by 20% over the next four years.
Despite stating that they intend to ‘retain an extensive network of free ATMs for consumers’, in correspondence between LINK and Nicky Morgan, Sir Mark Boleat wrote: “We expect the immediate number of closures to be negligible. In the long run, we do expect ATM numbers to decline, should consumers choose to move from away cash to alternative payment options.”
The correspondence follows interviews with LINK CEO John Howells last week where he suggested that cash machines could be phased out entirely over the next decade, with the services being offered by retailers in stores instead. Speaking to the Daily Mail, Mr Howells said: “In a five to ten-year window, there will come a point where we’ll have to not have ATMs. We need other ways for consumers to access cash, and the obvious way is through retailers’ tills.”
Treasury Select Committee Chair Nicky Morgan MP said: “LINK has committed to maintaining the reach of the current network of free-to-use ATMs. Given the information currently available, it’s difficult to see how they can guarantee that this commitment will be met. As bank closures increase, so too does the reliance on ATMs. Every effort must be taken to ensure that the 2.7 million people reliant almost entirely on cash transactions aren’t cut off.”
Association of Convenience Stores chief executive James Lowman said: “There are many local traders, market stalls and other small businesses in towns and villages across the UK that can only accept cash, and these businesses often rely on nearby ATMs to ensure that people can shop with them. Convenience stores have invested in the provision of free cash machines as part of their commitment to serve thousands of communities, but this is under threat by LINK’s proposals which could make many unviable.
“Any proposals that would result in a reduction in the number of cash machines must be scrutinised in detail, and we welcome Nicky Morgan’s comments on the issue. Cash remains an essential part of a convenience store business, so any reduction in the number of locally available ATMs could have a significant negative impact, both on convenience stores and other local businesses. We would also be very concerned if the removal of ATMs meant that retailers were required to keep large amounts of cash in their tills, as this could encourage crime against stores and have safety implications for staff.”
The 2017 Local Shop Report shows that 58% of stores in the convenience sector have a cash machine. 45% of stores provide a free to use cash machine, while 13% have charged cash machines.
Cash remains an essential method of payment for customers in convenience stores, with HIM research showing that 76% of customers pay in cash.
