LINK is consulting its Members and the LINK Consumer Council on proposals to reduce the level of interchange - the fee paid by card issuers (banks and building societies) to ATM operators. The proposals include:
The proposed changes are a result of a predicted fall in consumers’ demand for cash for payments as they increasingly move to alternatives such as contactless and online payments. Data from UK Finance predicts that over the next ten years, the number of cash payments will fall by 43% to 8.7 billion payments, with the total value predicted to fall by 23% to £185 billion in 20261.
The number of cash machines in the UK is currently at near record levels, with more than 70,000 ATMs across the country, around 80 per cent of which are free-to-use.
LINK’s CEO John Howells commented: “LINK is committed to maintaining an extensive network of free-to-use cash machines. Free access to cash is vital for UK consumers and LINK intends to maintain this for many years to come.”
The interchange rate was previously set by ATM industry participants, as part of the LINK Network Members Council. Responsibility for setting the interchange rate has now moved to the independent LINK Board, which has a clearly defined public interest remit, in order to meet regulatory requirements on the governance of payment systems2.
The views of LINK Members and the LINK Consumer Council are being sought by 30th November 2017 and it is expected that the Board’s final decision will be published by 31st January 2018 and implemented by 1st April 2018.
A public summary of the Member consultation can be downloaded here.
2) Bank of England Code of Practice and supervisory statement relating to governance of recognised payment system operators. http://www.bankofengland.co.uk/financialstability/Documents/fmi/governance0617.pdf