The Association of Convenience Stores has welcomed comments from Rt Hon Nicky Morgan MP, Chair of the Treasury Select Committee, about the importance of the UK
cash machine network and the potential impact that reductions in interchange fees could have on local shops and other small businesses.
In a consultation published earlier this month, LINK proposes to reduce the level of interchange rates (the fee paid by card issuers to ATM operators) by 20% over the next four years. They state that they intend to ‘retain an extensive network of free ATMs for consumers’ but that ‘the proposed changes are a result of a predicted fall in consumers’ demand for cash for payments’, suggesting that the number of free ATMs available to customers could fall as a result of the proposals.
Morgan has written to Sir Mark Boleat, Chair of LINK, about the consultation. She said: “LINK established its Financial Inclusion Programme as a result of an inquiry from a previous Treasury Committee into the provision of cash machines. The programme requires LINK to defend and improve access to cash for all UK consumers. Yet with the proposed 20 per cent reduction of the interchange fee, it seems intuitive that some machines will become economically unviable.
“There have been concerns that the proposals could lead to ‘ATM deserts’ for communities. As the Bank of England’s Chief Cashier said, cash continues to play a key role for many, with 2.7 million people in the UK reliant almost entirely on cash transactions. I have asked LINK for assurances that the proposals will preserve the existing geographic spread of ATMs, and will have no negative impact on financial inclusion.”
ACS chief executive James Lowman said: “Free to use cash machines support not just the businesses that house them, but also other shops, markets and small businesses that still rely on cash for payment. Reducing interchange fees, payable by banks for their customers to use these facilities, could lead to some cash machines being removed from local shops. We welcome Nicky Morgan’s comments on this issue and urge LINK to think carefully about the consequences of the ATM network shrinking.
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 also remains an essential method of payment for customers in convenience stores. HIM research featured in the 2017 Local Shop Report shows that 76% of customers pay in cash.
Details of the LINK consultation are available here: https://www.link.co.uk/about/news/link-proposals-for-funding-the-free-atm-network/