Cash machines disappearing at rate of 300 per month, research finds

Rate of closures has increased sixfold in the period from November 2017 to April 2018 from a steady pace of 50 per month since 2015

New changes set to come in from Sunday will mean cash machine operators are paid less for transactions on some ATMs (PA)

Cash machines have been disappearing at a rate of 300 a month, with rural areas hardest hit, according to new research.

The rate of closures has increased sixfold in the period from November 2017 to April this year from a steady pace of 50 per month since 2015, according to analysis by Which?.

Changes coming in on Sunday will mean cash machine operators are paid less for transactions on many ATMs, making the network less profitable to run.

Link, the organisation that runs the UK’s largest network of cash machines, has said that closures resulting from the funding changes would be focused on urban areas where consumers would be able to find other alternative ATMs.

But the new report shows rural communities have lost 2.1 per cent of their cash machines over the period – slightly more than towns and cities where 2 per cent have disappeared. Scotland suffered the worst losses, with 2.9 per cent of machines being removed.

Closures accelerated as operators began to learn of Link’s plans, Which? said. The consumer group is calling on the Payment Systems Regulator to act urgently to halt the cuts until a thorough assessment of their impact can be made. It comes as local communities also rapidly lose bank branches as lenders cut costs and focus more on online banking.

Link said on Friday its plans were designed to protect cash machine coverage in a declining market by increasing the fees paid to operators for transactions – known as interchange fees – in rural areas.

At the same time it will increase the fees in urban areas where it says there is an oversupply of cash machines.

“This will mean that whilst the overall number of machines is likely to fall in over-provided areas, the overall coverage will be protected for consumers,” Link said. It added that the number of free-to-use cash machines has increased.

Cash payments have fallen by a third in the last decade but the number of ATMs has risen by half in that period, meaning an additional 18,000 machines, Link said.

But one of the largest independent ATM providers, NoteMachine, said learning of the changes in late 2017 had “an immediate effect” on its ability to maintain widespread free access.

Harry Rose, Which? money editor, said Link’s plans risk destroying the cash machine network. “These cuts could see millions of people who rely on cash in their daily lives struggling through these closures – with severe consequences for many communities and businesses,” he said.

David Clarke, head of policy and advocacy at Positive Money, said cash machines were important for millions of people.

“Though they may not be profitable for Link’s member banks, who’ve demanded this fee cut, ATMs are a key amenity for the 2.2 million people in the UK who rely on cash to go about their everyday lives,” he said.

“The scale of ATM closures, particularly in rural areas, shows that regulators are ill-equipped to safeguard people’s access to cash, which is under threat from moves by banks and card companies.”

The Federation of Small Businesses (FSB) has joined the consumer group in a campaign to save ATMs.

Mike Cherry, national chairman of the FSB, said: “It looks as though the prospect of Link’s interchange fee cut alone is enough to cause cash points to disappear at an alarming rate. Introduction of the cut will likely see the situation go from bad to worse.”