MPs from across the House of Commons have called on the Chancellor to act now to protect the UK cash infrastructure from imminent collapse, as people shun ATMs due to the Covid-19 outbreak.
The Covid-19 pandemic is radically changing cash usage in the UK, with ATM withdrawals falling 60% during the lockdown and three quarters of Brits reporting that their use of paper money is down.
Politicians are calling on the Chancellor to urgently bring forward legislation to protect the UK’s cash infrastructure by reviving free-to-use cash machines for local economies and communities, and reversing cuts to interchange fees.
The letter derides the Link ATM network’s guarantee that communities facing cash shortages will have their fee-free cash machines replaced by a member bank.
“Whilst we welcome any measures which support access to cash, this will not address the root cause of why access to cash is declining,” they write. “The measure is derisory, addressing only future ATM losses and not those that have already been lost or converted to pay to use. Link’s pledge will only protect ATMs for 12 months and, while Link states this will benefit 3,800 ATMs, it will in reality only cover a small proportion of these machines which it considers ‘critical’.”
Campaigners and businesses have already written to the Chancellor urging him to reverse the cuts made to the fee paid by banks to ATM providers for every cash withdrawal, pointing out that banks have saved £200 million in the two years since interchange rates were changed.
“Link’s new scheme, which will cost banks a mere £4 million, falls significantly short in filling this gap,” says the MPs. “With banks refusing to properly fund the ATM network, customers are losing out as free to use cash machines become unviable meaning operators must start charging. This is happening as banks increasingly withdraw their own frontline services and close branches across the UK.”
Cuts to the interchange fee have led to the growth of pay to use cash machines which have impacted less well-off consumers the most, paying £1 to £2 to withdraw £10 or £20, instead of their banks paying an interchange fee of circa 40 pence (up from 25 pence) for a ‘free’ transaction.
“As overall ATM transactions have halved this would still be much less than the banks would have expected to pay immediately before the pandemic,” the letter states. “This would also ensure the long-term viability of the UK’s cash infrastructure.”
