UK Cash Points Close Ahead Of ATM Interchange Fee Drop


Ahead of a planned reduction in interchange fees, which card issuers pay for cash withdrawals at ATMs in the U.K., data from LINK indicates that over 500 cash points have closed this year over a five-month period to May. During that time, the number of cash points in the U.K. declined by 2,611 to 66,999 cash points, Financial Times reported.

Which? circulated data indicating a similar trend: The consumer group showed that nearly 300 ATMs had shuttered each month from December to April. Those figures mark a significant departure from earlier trends in closures, when 50 ATMs were closing each month. But LINK said that during a December to April period, “the number of free-to-use ATMs actually increased.”

Either way, the contention arises from LINK’s November decision to reduce the interchange fee from 25p to 20p over a four-year period, beginning this summer. Consumer groups and politicians are concerned that such a change could make it harder for those in rural areas or small businesses to withdraw or deposit cash. LINK and the banks, however, have said that the current system of ATMs is inefficient: 80 percent of the U.K.'s free-to-use machines are only about 300m apart, they said.

The news comes more than a year after LINK was mulling an overhaul of its business, to address banks that are looking to lower the costs of offering customers free ATM withdrawals.

According to a report at the time, LINK ATM’s network was comprised of 70,000 cash machines around the country. The cost to use the free ATM network in the U.K. amounts to roughly £1 billion, while LINK member bank transactions stand at roughly £750 million. Banks in the U.K. are beginning to push back from the cost, which the report noted equals a 25-pence surcharge for each customer that uses an ATM that is not part of the bank’s branch.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.