Convenience stores are urging the operator of the UK’s largest cash machine network to scrap further cuts planned to the fees it charges for transactions in an attempt to stem the “torrent” of free-to-use ATM closures.

The Association of Convenience Stores (ACS) said previous cuts by Link to the so-called interchange fee – payments made by banks to cash machine operators every time money is withdrawn – led to thousands of free cash machines being closed across the UK.

The ACS, which represents 33,500 shops, claims that for millions of consumers the local shop is the only place where they have access to cash, given that over the last five years more than a third of bank branches have been closed in the UK.

The consumer group Which? has also said that Link’s previous cuts led to one in 10 of Britain’s cash machines being either lost or moved to a pay-to-use model.

Link is the national ATM network that connects virtually all the UK’s cash machines, accounting for about three-quarters of all cash withdrawals. It operates about 61,000 machines, of which about 47,500 are free to use and the rest charge users.

In 2018 it announced plans to reduce the interchange fee by 20% from 25p to 20p over four years. It has gone ahead with the first two cuts, reducing the fee from 25p to 22.5p. The third was due next month but was cancelled by Link because of falling ATM transaction volumes and the next planned cut, for January 2021, is under review.

In the past retailers received a modest income from the fees, but increasingly they are paying ATM operators to ensure their machines remain free to use while also being lumbered with additional security issues and costs.

James Lowman, the chief executive of the Association of Convenience Stores, said: “Protecting access to cash is crucial for the millions of people that still rely on it every day. Communities across the UK have been left without a cash machine at all as a result of Link’s programme of cuts to fees, with many more only being able to get to a machine locally that charges to withdraw money. Link must stop the cuts that have been so damaging to the network and ensure that the local shops who offer cash machines are supported.”

Falling usage of cash in the UK has been driven by consumers switching to contactless payments for small purchases. But the ACS says more than 2 million people rely on cash every day, with usage spiking over the festive period. The busiest day for cash usage so far this year was on Friday 20 December.

John Howells, the chief executive of Link, said: “Cash use is falling and Link data shows ATM use also declining at over 10% year on year. Link believes every community should have free access to cash and so has increased interchange where necessary to maintain a free ATM. Where an ATM isn’t possible, Link supports the free withdrawal service available at every Post Office.”

Gareth Shaw of Which? said: “It’s clear that industry measures alone cannot prevent further reductions to the network of free ATMs. The government must take urgent steps to fix the UK’s broken cash landscape and introduce legislation to ensure people continue to have free access to their cash for as long as it is needed.”