From 1 July, the ATM network LINK is set to start the process of cutting the interchange fee paid by card providers to ATM operators by 20 per cent. LINK has said that it will continue its Financial Inclusion Programme, with the drop in interchange fee not applying to free-to-use ATMs that are one kilometre or more from the next free-to-use cashpoint.
FSB research shows that half (50%) of small firms surveyed are already a kilometre or more from their nearest free-to-use cash point. One in seven (15%) say their closest free ATM is at least five kilometres away.
The majority (51%) of small businesses with a view on free-to-use ATMs say cashpoints are important to their firm. Among retailers, the figure rises to six in ten (59%).
More than half (53%) of retailers with an opinion on the issue say that losing access to their nearest free-to-use cash machine would hurt revenues. Around one in three (31%) say that it would impact on their ability to retain customers.
FSB and Which? have launched the #SaveOurCashpoints campaign, urging the Payment Systems Regulator (PSR) to pause LINK’s plans while it conducts a full market review.
A Private Member’s Bill echoing the campaign’s call was tabled in parliament earlier this month. Meanwhile, a legal case centring on the business rates charged to retailers for hosting cash machines is due to be heard in the Court of Appeal in the coming weeks.
As their share of the payment market has increased, card providers have hiked fees. The scheme fees charged by VISA across Europe are estimated to have doubled from €2.3 billion in 2016 to €4.6 billion in 2018.
FSB National Chairman Mike Cherry said: “Less cash flow in local economies means less growth. LINK’s plans are a threat to the success of high streets all over the country. What’s more, the loss of cash points disproportionately hurts the most vulnerable consumers: the elderly, households on lower incomes and those less able to travel.
“LINK is defending an interchange fee cut by promising to improve an inclusion programme that’s failing. Quite how it can achieve its, to date, illusive target of bringing everyone within a kilometre of a free-to-use ATM with less funding is a mystery. Many small firms are already miles from their nearest free-to-use cash point.
“Access to cash is being squeezed from all sides. Not only have we had the loss of thousands of bank branches in recent years, retailers are being unfairly hit with additional business rates if they choose to provide the public with a cash point.
"Meanwhile, payment card providers are upping fees at every turn – fees which are ultimately picked up by business owners. Cash means competition for card providers. The less access there is to it, the more they’re in a position to increase charges.
“The Treasury Committee, Payment Systems Regulator and independent ATM operators with a majority share of the remote cash machine market have all voiced concerns about LINK’s plans. It’s time for the PSR to step-in before real damage is done.”