ATMs under threat

LINK’s plans to reduce the fees it charges to use its ATMs by 20%, from 25p to 20p, has definitely caused a bit of a stir. Many are worried that the move could lead to a number of ATMs’ demise, possibly leaving those in smaller communities without one.

LINK states that there are too many cash machines where they are not needed. However, consumer advice company Which? believes this could lead to the closure of many free-to-use machines.

According to the group, more than 200 communities already have poor ATM provision and 123 postcode districts already do not have a single ATM.

Cardtronics released a statement that said that free-to-use model would become “unsustainable” if this plan is implemented.

At present, the UK has a record number of ATMs – about 70,000 – with 55,000 free to use. By international standards, see table, the UK consumer is pretty well catered for by ATMs.

Ian Bradbury, chief technology officer - Financial Services Business at Fujitsu UK & Ireland, says: “Although we are moving towards a cashless society, and its benefits are undeniable, ATMs still play an important role in the financial life of Brits across the country, and reduced access to these might have unpredictable consequences for a number of industries besides the financial services – such as retail and hospitality.

“The problem highlighted by the report by Which? is that there are too many cash machines in places where they are not needed, with around 80% located within 300 metres of other ATMs. Instead, we must vouch for a more homogenous spread of ATMs across all regions, giving consumers reasonable access to cash while keeping the maintenance costs low. As technology continues to change banking, we expect to see self-service devices, including ATMs, take on a new importance within branch operations.

“We also expect to see the market increasingly look for ways of lowering the costs associated with maintaining an ATM estate. This will be seen in terms of power and energy savings, easier installation and simpler maintenance. In particular, the costs associated with cash replenishment and machine maintenance are becoming a growing challenge for bank, leading to machines equipped with banknote recycling capabilities being deployed in markets where regulators permit such a capability.

From this perspective, yes – deploying and maintaining ATMs must be done in a strategic manner. This being said, with the rapidly changing consumer expectations, businesses and banks must keep in mind that placing a strain on communities that already struggle to access cash might backfire.

Sudhesh Giriyan, COO of Xpress Money, adds: “While consumers may be inconvenienced by Link’s decision to reduce the number of free ATMs across the UK, many organisations, such as banks, fintechs, remittance services and technology platforms, have already begun deploying alternative ways to access and spend money, without a reliance on cash.

“Facebook’s recent move into peer-to-peer payments is a shining example that even companies not traditionally associated with finance are making it as convenient as possible for consumers to send and receive money.  

“The UK has only just begun its transformation towards a cashless society, but there are already some great success stories across the world. From Sweden’s mobile payments network, with just 1% of all national transactions now via cash; to China and its dependence on social channels and QR codes, with even those in need asking for donations via digital wallets. This move away from free ATMs is another gentle nudge to encourage consumers to embrace new payment technology.”

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