The Association of Convenience Stores has condemned a move from LINK, which has today confirmed that it will reduce the interchange fee for card transactions by 5p over the next four years.

ACS chief executive James Lowman said: “Banks have been cutting back their own branch networks, and now they are reducing the interchange fees that fund the network of ATMs provided by retailers and private companies in places that banks have abandoned. We are concerned that this will lead to a reduction in the number of ATMs, and their reach and accessibility for all types of communities.

“We are not convinced that the measures to support isolated ATMs go far enough, and we will be monitoring closely the impact of the reduction in interchange fees on cash machines hosted by our members.”

In its announcement LINK said the changes were “designed to maintain and rebalance the UK’s ATM network – shifting incentives from deploying ATMs in city centres to rural and less-affluent communities”.

It pledged:

all ATMs one kilometre or more from the next free ATM will be exempt from any reductions in interchange;

an enhanced subsidy of up to 30p (tripling the current 10p) will be paid wherever needed to ensure that free ATMs remain in areas that could not otherwise sustain them.

John Howells, chief executive of LINK, said: “LINK is committed to protecting free access to cash. The UK has a near record number of ATMs, yet the recent growth has led to the majority of these being placed in busy areas where there simply is no need for a new ATM. The combination of a reduction of the interchange, with the significant strengthening of the Financial Inclusion Programme, will begin to rebalance the network, making sure we protect and install new ATMs in locations that really need them.”

Throughout LINK’s consultation process, the Treasury Select Committee has raised concerns about the impact that reducing interchange fees will have on local communities’ access to cash, especially in isolated areas.

Lowman continued: “We welcome the interest shown in this issue by the Treasury Select Committee led by Nicky Morgan MP, and we will continue to work with the Committee, other parliamentarians and the Government to ensure that we maintain the provision of cash to all types of communities.”

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.

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