Free-to-use cash machines could soon be a thing of the past

The proposals follow a row over the funding of cash dispensers
The proposals follow a row over the funding of cash dispensers

Plans to protect the free-to-use cash machines have been put forward by the UK's Link network - amid fears that consumers face the possibility of "ATM deserts".

The proposals follow a row over the funding of cash dispensers - and warnings that consumers face the possibility of more machines charging them to withdraw money, or disappearing altogether.

A body representing ATM operators warned that Link's proposals could lead to "a vast reduction in free access to cash" and "ATM deserts".

The row centres around interchange fees paid by card issuers such as banks and building societies to ATM operators. The interchange fee funds the free-to-use ATM network.

Responsibility for setting the interchange rate rests with the Link Board, which has a public interest remit.

The plans outlined by Link on Wednesday include a reduction in interchange rates over the next four years, from around 25p to 20p per withdrawal.

Link said the plans will help to retain an extensive network of free ATMs for consumers.

It said ATM numbers have been growing over recent years, despite declining consumer demand for cash for payments at a time when people are increasingly paying by contactless, for example.

But trade body the ATM Industry Association warned that "ATM deserts" could be created.

Ron Delnevo, executive director Europe of the association, said of Link's new proposals: "Make no mistake, this may well lead to a vast reduction in free access to cash for British citizens and businesses.

"Any money saved by a tiny number of banks, which some estimates put at tens of millions of pounds each year, will effectively be at the expense of already hard-pressed consumers."

He added: "We already have thousands of bank branch deserts in the UK. There are now also going to be ATM deserts, where communities will wither because of no access to cash and other financial services."

Link said the number of cash machines in the UK is currently at near record levels, with more than 70,000 ATMs across the country, around 80% of which are free for consumers.

It said Link's financial inclusion programme will help maintain "extensive free access to cash for all in the UK".

Link argued that its proposals would help maintain the spread of ATMs in deprived communities and rural areas, while any reduction in the number of cash machines is intended to be in areas where they are already clustered together. It said around 80% of free-to-use ATMs are within 300 metres of another free-to-use machine.

Link is seeking views by November 30 before a final decision on January 31 2018, which will be implemented on April 1 next year.

Chief executive John Howells said: "Link is committed to maintaining an extensive network of free-to-use cash machines.

"Free access to cash is vital for UK consumers and Link intends to maintain this for many years to come."