Cash Dispensing: Fees and Charges

(asked on 1st May 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to ensure that reductions in the interchange rate do not result in free ATMs becoming pay ATMs.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 8th May 2019

Last year, Government launched a Call for Evidence on Cash and Digital Payments in the New Economy. One part of the wide range of evidence collected detailed the changing levels of cash usage. Responses showed that, although the proportion of cash transactions is expected to fall over the next 10 years, cash remains important in the lives of many people and businesses across the UK. That’s why the Government is committed to supporting digital payments, whilst safeguarding access to cash for those who need it. The Government is engaging, and will continue to engage, with the regulators and industry on this important topic.

The Government has not made an assessment of the effect on poor households of free-to-use ATMs becoming pay-to-use. However, the Government-established Payment Systems Regulator (PSR) is closely monitoring developments in ATM provision, including those that are free-to-use. The PSR regulates LINK, the scheme which runs the UK’s ATM network, and has used its powers to hold LINK to account over LINK’s commitments to preserve the broad geographic spread of the ATM network.

The PSR has set out requirements of LINK, including that any cuts to interchange fees (the fees which fund free-to-use ATMs) must be incremental, with action taken by LINK where the impact is not as expected. Having implemented two of the four planned incremental reductions to the interchange fee, LINK has cancelled the third reduction and put on hold the fourth. The PSR welcomed these adjustments, having stated that LINK must carefully review its decisions on interchange fees to reflect changing market conditions. These adjustments gave the PSR further assurances that LINK is committed to making sure communities do not lose their free-to-use ATMs.

LINK has put in place specific arrangements to protect free-to-use ATMs more than 1 kilometre away from the next nearest free-to-use ATM. LINK has also enhanced its Financial Inclusion Programme by tripling the funding available to ATMs in the most deprived areas of the UK and undertaken new financial support for ATMs in remote and deprived areas.

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