In April this year LINK, the network that connects almost every free and charging cash machine in the UK, commissioned HIM to survey the users of both free and charging cash machine users.
The survey represents the next step in LINK's work to achieve complete transparency of cash machine charges.
This new survey now delivers on the LINK Members' commitment made last year to review the new rules with the benefit of the lessons to be learnt from on-the-ground experience of their effectiveness. It will allow an evidence-based analysis of how the rules can be further improved.
The survey showed that although some charging cash machine customers did recognise the machine charged from the compulsory label on the outside of the machine (the first warning required under LINK rules), four times as many people recognised the cash machine charged because of the warning they saw on the screen before starting the transaction (the second warning required under LINK rules). One-in-six to one-in-seven users could not, however, recall any warning even after confirming acceptance of the charge.
Edwin Latter, LINK ATM Scheme Director, said "All LINK Members - banks and independent cash machine deployers - unanimously agreed last year to commission an independent survey to assess the effectiveness of new LINK rules requiring three or more different warnings of charges. This survey now gives LINK some credible evidence on which to base decisions about how best to develop these rules to achieve transparency objectives."
"One lesson from this survey is that people are much more likely to read the up-front warnings on the screen than to notice stickers on the outside of the machine. This suggests that, as the next step in its work on transparency of charges, LINK should look at clearer and larger standardised warnings on the screen, rather than concentrating on more external stickers. LINK has also learnt from our policing and enforcing work that stickers are easily vandalised, whereas the screen is more reliably under the control of our members."
The survey also showed that no matter how many signs are put up, a number of people do not notice or are not interested in the warnings. Every charging cash machine in Britain asks the user specifically to confirm acceptance of the charge before completing the transaction. While the majority of people surveyed immediately after completing the transaction remembered this or the upfront warning, in some quick-stop locations such as petrol stations over half of people could not remember the warning even just a few moments after telling the machine they accepted the charge. This was particularly true for men, while women demonstrated they had read the instructions more carefully. 98% of users of charging machines said they used the machine for its convenience or for quick access to cash.
Mike Greene, CEO of HIM, conductors of the survey said "These results are not as unusual as they may at first seem. Most people cannot remember the price paid in a retail transaction even a few seconds after the purchase. People are busy, and convenience and speed can be more important than price."
Other work by HIM shows how important cash machines are to the survival of local convenience stores. Putting LINK and HIM statistics together suggests, however, that some convenience stores may be missing a trick by having charging rather than free cash machines. LINK statistics show that the average free cash machine does 15-20 times more cash-withdrawal transactions than the average charging machine. Meanwhile, cash machine users visit convenience stores 18% more often than other customers and spend on average 11% more. The scales could be tipping further in favour of a landlord who chooses a free machine: while the average number of transactions at free cash machines has risen over the past years, the average number of transactions at surcharging cash machines has fallen.
Other results
About half those surveyed knew that the fee paid at a charging machine is paid to the operator of the machine and (often, and at least in part) to the landlord at the site. Over a third wrongly thought that the bank receives the fee, and one in ten wrongly thought that LINK receives the fee.
Nearly all cash machine users knew that machines at bank branches were free. Only 3%-4% of those surveyed thought that machines at bank branches might be charging. In fact, all machines at bank branches are free. The public knew that cash machines in pubs or nightclubs were the most likely to have a surcharge. In other locations, expectations varied. Less than one in five users of charging machines and less than one in ten users of free machines expected cash machines in hospitals to apply a fee, whereas around 30% of hospital cash machines are charging.
More than half of people using charging machines used a cash machine more than three times a week, but only 12% of them said they used that particular charging machine once a week or more, suggesting they had a choice of which cash machine to use. Although 80% of those that used a charging machine said they would use it again, 13% said that they would not - in most cases because they preferred to use a free machine instead.
21% of people using charging machines said they needed to get cash urgently, compared with only 10% of free machine users.
Next steps
LINK Members will now review the full results of the survey and discuss them with LINK's newly established panel of consumer representatives which met for the first time on 27 April (see http://www.link.co.uk/press/mn_press_release%20270406.html for details). In the light of this evidence and consultation, Members will decide how the rules can best be further developed.
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Notes
Over 96% of cash withdrawals are made at free machines. The remainder (one in twenty five transactions) are done at charging machines.
Like the government and Treasury Select Committee, LINK considers that allowing charging cash machines benefits the public by expanding access to cash, offering choice where there would otherwise be none, and benefiting local economies and small businesses - providing that there are clear warnings of any charges made.
On Thursday 4 May, Economic Secretary to the Treasury Ivan Lewis is hosting a round-table meeting between the banking and cash machine industries, consumer groups, Treasury Select Committee and others to review progress in cash machine provision since the Treasury Select Committee reported in March 2005. The Treasury Committee recommended that LINK should undertake and publish independent research into consumer awareness of charges and the factors that drive consumer behaviour when deciding which cash machines to use. This research delivers on that recommendation.
Press Enquiries:
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Edwin Latter |
Graham Mott |
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