One in five of the 55,000 free-to-use cash machines in the UK could be at risk of closure after proposals were announced to change the way the ATM network operates.

Concerns arose after Link, which runs the network, announced a month-long consultation on cutting the fees that the 38 members of the network pay each other when customers take out cash.

The industry lobby group, the ATM Industry Association, calculated that at least 10,000 free-to-use cash machines could be at risk – almost one in five of the 55,000 ATMs at which customers can withdraw cash without incurring fees.

Ron Delnevo, executive director for Europe of the ATMIA, said: “Make no mistake, this may well lead to a vast reduction in free access to cash for British citizens and businesses.

“Any money saved by a tiny number of banks, which some estimates put at tens of millions of pounds each year, will effectively be at the expense of already hard-pressed consumers.”



He warned that “ATM deserts” would be created across the UK as providers shut unprofitable machines in deprived areas.

But this was denied by John Howells, the chief executive of Link, whose members include card issuers such as banks, as well as the private companies that install machines around the UK.

The aim, Howells said, was to reduce the £1bn annual running cost of the network, which has 70,000 ATMs when machines that charge are included. He said provisions had been put in place to ensure communities were not left without free access to cash.

Howells added that a cut had been proposed to the interchange fee that the card issuers in the network pay each other, and the independent providers, when their customers withdraw cash.

This interchange fee is calculated by dividing the cost of running the free-to-use network by the number of transactions, and is currently around 25p. Link is proposing a 20% cut over four years starting in April, but it says 10p would be added to the fee to ensure communities did not lose their last free-to-use ATM.

Howells said the impact of the fee cut would be minimal for consumers, but there could be fewer machines in areas where there were already a large number of ATMs. “I don’t see any justification for 10 ATMS on one high street,” he said.

He added that there were 5,000 more free-to-use ATMs than three years ago, even though the use of cash was falling. Link’s plans were intended to put a brake on this growth.

“Link is committed to maintaining an extensive network of free-to-use cash machines. Free access to cash is vital for UK consumers and Link intends to maintain this for many years to come,” said Howells.

This appears to be the first major attempt to change the way the network is run since 2000, when there was a row over charges that eventually led to the current system of free-to-use machines.

The proposals are being made at a time when the governance of the ATM network is changing from a 38-member operation to a company run by an independent board, chaired by Sir Mark Boleat, the former policy chair at the City of London Corporation.

Delnevo urged customers to write to their MPs, adding: “The regulators and the government need to step in immediately to stop a potentially catastrophic situation developing.”