‘Super premiums’ will help protect ATMs in remote areas, says Link

Cash machine operators are to be given “super premiums” to help keep ATMs in remote areas open from April.

Link, the UK’s main cash machine network, said a new super premium will be paid by banks to ATM operators in some places where cash machines are situated in remote and less well-off parts of the country.

ATM operators will receive enhanced premiums of up to £2.75 each time someone withdraws cash from an eligible machine under the changes.

Around 1,000 cash machines will initially be eligible and the enhanced premiums will vary in size depending on how well a particular ATM is used.

LINK weekly volume and value data pic.twitter.com/TEMexD9l0m

— LINK Scheme (@LINK_ATM_Scheme) January 14, 2019

Currently, operators of eligible ATMs receive a top-up subsidy of up to 30p through Link’s financial inclusion programme.

Payments are in addition to the interchange rate – the fee card issuers pay to ATM operators.

The new enhanced premium means an operator could potentially receive as much as around £3 when someone takes out cash when the super premium and interchange rate are added together.

Link expects the super premiums, which take effect from April 1 2019, could also lead to some cash machines which currently charge consumers to withdraw money being converted to free-to-use ones.

The move follows a row over plans for a phased reduction in interchange rates, which led to fears that “cash deserts” could be created as more cash machines may no longer be viable.

There are more than 50,000 free-to-use ATMs across the UK – and the vast majority will not be eligible for the new super premiums.

Currently, around 3,500 ATMs are protected – because they are more than 1km (0.6 miles) away from the next nearest free ATM or they are located in particularly deprived parts of the country where access to cash is vital.

These ATMs were ringfenced from the reforms to interchange rates due to playing a key role in continuing people’s access to cash.

Of these protected ATMs, around 1,000 will initially be eligible to receive the premiums to help keep them open – but it is thought that more of the 3,500 protected ATMs will be eligible over time as cash withdrawal volumes at ATMs fall.

The subsidy is dependent on volumes. If an ATM is not used very often, so could otherwise be at risk of closing, but is protected, it will receive the subsidy.

People keep cash at home because….. To read the full Access to Cash report please click: https://t.co/Drj94467Mf pic.twitter.com/CjcbJSpqoj

— LINK Scheme (@LINK_ATM_Scheme) December 20, 2018

Link chief executive John Howells said: “We are delighted to announce this increase in financial support for ATMs in remote and deprived areas that provide a vital service to communities.

“While many consumers are turning to alternative payment methods such as contactless cards, it is vital we continue to provide free access to cash to those who need it.

“These premiums will further safeguard ATMs in remote and less well-off areas.”

The move follows the row which erupted last year over the future funding of ATMs, leading to fears that people would struggle to access cash as bank branches and cash machines shut down.

Link previously set out plans to cut the fees operators receive from banks when ATMs are used – but said that all ATMs 1km or more from the next free ATM would be exempt from reductions in the interchange fee as well as promising the enhanced subsidies where needed to ensure that free ATMs remain in areas that could not otherwise sustain them.

Jenni Allen, managing director, Which? Money, said: “Boosting premiums for machines in remote areas has so far not been enough to stop cashpoints closing around the country, including in more remote areas where they are desperately needed – so we hope this latest move from Link is enough to arrest this alarming trend.

“What is urgently needed is for a regulator to be given a duty to protect access to cash, so that the millions of people who rely on it in their lives are protected from rapid changes through ATM and bank branch closures.”

Federation of Small Businesses (FSB) national chairman Mike Cherry, said: “Millions of small firms have customers who want to use cash – close to £100 billion is spent in shops using coins and notes every year.

“When a local cashpoint is lost, sales often take a direct hit.

“A lot of remote, vulnerable communities – where a high proportion of shoppers want to use cash – are having to battle bank branch closures alongside Link’s cuts to cash machine funding.

“Reduced cashflow in these local economies hurts footfall on high streets and restricts economic growth.”