Labour MP Ged Killen has tabled a new Bill seeking to ensure the provision of cash machines in the future, heavily criticising LINK’s decision to reduce the interchange fees paid to ATM operators.
The Bill seeks to provide a legal requirement for access to cash withdrawals through ATMs or other means where there is a demand for it. Such demand would be established through a full market review of the ATM network by the Payment Systems Regulator. The Bill would also remove charges for ATM transactions so that all ATMs would be free-to-use.
In the motion to bring forward the Bill, Mr Killen said: “LINK accepts that it wants to reduce the overall number of ATMs and says it expects this reduction to happen in city centres, where there are large clusters of ATMs, but there is simply no way of guaranteeing this effect. With different ATM companies working to different models across the UK, it is inevitable that there will be unintended consequences, and it is people in rural communities or smaller urban towns such as the ones I represent who are most likely to lose out.”
Currently, the business rates for ATM machines are calculated on the basis of their turnover (the number of transactions processed by the machine). As a result of this, free to use cash machines are far more expensive to operate than charged machines which have typically far lower usage levels.
ACS chief executive James Lowman said: “Convenience store customers still value cash as their primary method of payment, with cash machines in stores also enabling customers to shop with other local businesses, stalls and markets that are not set up to take card payments. We welcome the attention that the Bill gives to the issue of cash provision for local customers, and will continue to press for cash machines to be taken out of the rating system altogether so that business rates are not a barrier for retailers looking to provide this service.”
At the end of January, LINK confirmed that they would be reducing the interchange fee for card transactions (paid by the banks to the ATM providers) from 25p to 20p over the next four years. Since then, Exchequer Secretary Robert Jenrick MP has stated that the Government “expects the Payment Services Regulator to step in and act if needed” to ensure that the interests of the users of payment systems are promoted.
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.
The Banking (Cash Machine Charges and Financial Inclusion) Bill was read the First time on 16th May, and is to be read a second time on Friday 23 November. The full transcript of the motion is available here: https://hansard.parliament.uk/commons/2018-05-16/debates/91627E84-AA28-433D-9B46-15EB7C22BE23/Banking(CashMachineChargesAndFinancialInclusion)
