Source: Treasury Committee
LINK has launched a consultation on the future level of its interchange fee, which funds the free-to-use ATM network.
Under the proposals, the fee, which is paid by card issuers to ATM operators, would be reduced from 25p to 20p per cash withdrawal
Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, has written to Sir Mark Boleat, Chair of LINK, about the consultation. Commenting on the correspondence, Mrs Morgan 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.”
Responding to the Rt Hon Nicky Morgan MP, chairman of LINK, Sir Mark Boleat said:
“LINK is committed to maintaining an extensive free network of ATMs for consumers for years to come.
“LINK’s independent Board believes that reform is required to interchange and that it is currently too high. In particular, we do not see the growth of ATMs that is underway as sustainable, given the declining use of cash for making payments.
“The Board believes that its proposals will protect the future of the LINK network and will deliver the right outcome for consumers.
“The UK currently has around 70,000 ATMs, with around 55,000 of them being free-to-use. We do not envisage any scenario where there will be areas of the UK which will not continue to have free access to their money.
“Our proposals include a strong Financial Inclusion Programme that will ensure that there is positive impact on financial inclusion.
The consultation ends this week and the results will be published in January.