Consumers pay big price after free cash machines close

Consumers are paying millions of pounds more to withdraw money than two years ago following the closure of thousands of free-to-use cash machines. 

The amount paid by consumers to take cash out of ATMs rose by £29m to £104m last year as many free machines were withdrawn or converted to charge fees, new figures obtained by consumer group Which? revealed.

In contrast, a widespread reduction of cash points across Britain has saved banks £120m since January 2018, according to research from Link, which runs the UK’s largest cashpoint network. 

More than 8,700 free ATMs have closed since the beginning of 2018 following a cut in the fees paid by banks to third party cash machine operators, which left many ATMs no longer economically viable.

At the same time there has also been a rise in bank branch closures — with 1,203 having closed since January 2018.

“Massive cuts to the UK’s bank branch and cash machine networks have been highly lucrative for the big banks — but highly costly for millions of consumers,” said Gareth Shaw, head of money at Which?. “Entire communities have been cut off from cash or forced to pay hefty fees to access their own money.”

Mr Shaw added that poorer communities have been hit hardest by these changes, with those most reliant on cash and who can least afford to pay for withdrawals faced with charges of up to £2. Fee-charging machines now comprise a quarter of the entire network of 60,291 machines.

Which? called for the government to intervene with legislation that protects free access to cash for as long as it is needed.

“Banks must take greater responsibility for ensuring customers are supported to make the transition to digital if branches close and that those who are reliant on cash are not left behind by changes to the banking landscape,” Mr Shaw said.

John Howells, chief executive of Link, said: “As people use less cash, many ATMs will become less economically viable which means some ATMs will switch to charging.” He said it was important that the UK continued to have a “broad, extensive UK-wide free-to-use network”.

Banks have argued that interchange fees cost hundreds of millions of pounds each year and that much of the ATM network is inefficient, with many machines clustered in the same areas.

Eric Leenders, managing director of personal finance at UK Finance, said the banking and finance industry had introduced a number of measures to ensure access to cash remained free and widely accessible for those who continue to need it. 

“There is no ‘one size fits all’ approach however and understanding the needs of local communities is critical,” said Mr Leenders. “That is why, alongside Link’s commitments, UK Finance supports the new Community Access to Cash Pilots initiative which aims to help local communities develop and support access to cash solutions which work for them.”


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