Link makes u-turn on ATM fee cuts


Link, the UK’s main cash machine network, has dropped plans to cut the fee that banks pay each other when one of their customers withdraws cash from a rival’s free-to-use ATM.

Back in January, Link announced a phased 20% reduction in so-called interchange rates over four years, from around 25p to 20p. The idea was to try and reduce the total number of cash machines in operation. It also meant that retailers operating an ATM would lose around 1.25p per transaction per year, potentially making the machines unprofitable.

The first cut was implemented at the beginning of this month (July) when the ATM interchange fee was reduced from 25p to 23.75p. On Monday (July 16), and in response to a 6% year-on-year fall in the volume of ATM transactions, the Link Board announced that the next reduction in January 2019 would go ahead but that it had decided to cancel the third reduction, due in January 2020, and put on hold the fourth reduction, due in January 2021, pending a further review next year.

Link boss John Howells said: “Link is committed to maintaining the UK’s extensive coverage of free-to-use cash machines for many years to come. However, many consumers are turning to alternatives to cash more quickly than expected and usage of ATMs is now dropping at 6% per annum.

“Link will therefore adjust interchange to maintain free-to-use coverage in line with our commitments to the public and to our participants. Link will continue to monitor the cash machine network carefully and will not hesitate to make further changes as needed to protect UK consumers.”

The NFRN welcomed the decision to cancel the 2020 reduction, but called for next January’s cut to be suspended too.

NFRN National President Mike Mitchelson said: “It is disappointing that next January’s reduction, from 23.75p to 22.5p, will still go ahead and we would ask Link to look again at this.

“At the same time we would request that suppliers now desist from swapping free-to-use ATMs to pay-to-use machines in independent retailers’ premises and suspend trials of ‘lite’ fees of between 50p and 60p.”