Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, if he will make an assessment of the effect of LINK's decision to reduce its ATM interchange fee on the viability of small and medium-sized businesses in Kingston upon Hull West and Hessle constituency.

The Government recognises that widespread free access to cash remains extremely important to the day-to-day lives of many consumers and businesses in the UK. Government has been engaging and will continue to engage with the regulators and industry, including LINK, to ensure that it is maintained. At Spring Statement, Government also launched a public Call for Evidence on cash and digital payments which, amongst other things, sought to find out how cash usage and need varies by region.

The Government established the Payment Systems Regulator (PSR) in 2015 with a statutory objective to ensure that the UK’s payment systems work in the interests of their users. As part of this, the PSR is monitoring developments within ATM provision. The PSR has undertaken work to understand the impact on the provision of free-to-use ATMs that a reduction in interchange fees may have and a summary of the findings can be found on their website. The Government has therefore not made its own assessment of the impact and does not intend to do so.

The PSR have also set out three requirements of LINK: that LINK must maintain the current geographical spread of ATMs; that any changes made to interchange fees must be incremental to allow LINK to monitor the impact and take action if the impact is not as expected; and for a greater focus on LINK’s financial inclusion programme, to continue to fill gaps in the network. The PSR has committed to using its powers to act should LINK behave in a way that conflicts with its statutory objectives.