LONDON (Reuters) - LINK, Britain’s main cash machine network, announced cuts in the fees it charges card issuers, backed by measures aimed at making it more attractive to install free-to-use machines in less populated and poorer parts of the country.
LINK, which banks such as HSBC, Barclays, Lloyds and Royal Bank of Scotland use, came under pressure this month from lawmakers to avoid price cuts that would make it uneconomic to put machines in rural areas.
Banks have closed thousands of branches in recent years as more people bank online and use “contactless” cards rather than cash to pay for small purchases.
LINK said it will do “whatever it takes” to retain free access to cash for all communities.
“The UK has a near record number of ATMs, yet the recent growth has led to the majority of these being placed in busy areas where there simply is no need for a new ATM,” LINK Chief Executive John Howells said in a statement.
The big banks who account for many of the cards issued, have high numbers of cash machines and had called for cuts in the “interchange” fee that LINK charges them.
LINK said it would start a phased reduction in fees, with a five percent cut or one penny, from July.
“The position will then be reviewed annually taking into account the impact on consumers,” LINK said.
Parliament’s Treasury Select Committee said this month that regulators should block LINK’s fee reductions if they are found to be harming the availability of free-to-use cash machines, particularly in less populated areas.
“Any significant reduction in free access to cash would be an unacceptable outcome,” TSC Chair Nicky Morgan said in a statement on Wednesday.
The Federation of Small Businesses said it was not convinced that LINK’s announcement includes enough protections for vulnerable communities.
“There’s no guarantee that having everyone within a kilometre of a cashpoint will be enough to meet demand,” it said.
Reporting by Huw Jones; editing by Jason Neely