RESPONSE TO NATIONWIDE REPORT ON CASH MACHINES

There is no current evidence that free cash machines are under threat. There are over 32,000 free cash machines in the UK and 96% of cash withdrawals are free. There has in fact been a 2% rise in the number of free machines at non-branch locations over the past year. There has been a small offsetting fall in the number of machines in bank and building society branches. The number of charging cash machines has risen. The vast majority of new charging machines are in locations that previously had no cash machine.

Both the Treasury Select Committee and the Government accepted that charging cash machines are a legitimate business model, increasing access to cash and helping to sustain small businesses*.

Over the past year LINK and its Members have taken a range of actions to ensure full transparency of cash machine charges.

Rules on transparency of charges were tightened on 1 July 2005. The amount of any charge must be displayed on the ATM screen. The customer must confirm acceptance of any charge before completing a cash withdrawal. LINK is currently surveying compliance with these rules. Members of LINK have agreed that penalties will be payable by those found not to be compliant.

When Members considered a proposal on red and green signs in May 2005, they chose to implement the current rules. Many banks have already invested considerable sums in labelling their cash machines as free in a way that is prominent given their own particular brand colours. LINK and its Members continue to review the effectiveness of these rules and whether alternative solutions would be more, or less effective.

LINK publishes on its website information on the number of free and charging cash machines as well as data on trends in the number of transactions that are charged. See www.link.co.uk for details.

(*House of Commons Treasury Committee, Cash Machine Charges, Fifth Report of Sessions 2004-2005. HC 191 page 56 para3)

Background

• LINK is the UK's national cash machine (ATM) interchange network and the busiest ATM transaction switch in the world.
• It deals with up to 225m transactions per month and at its busiest, it processes almost 1 million transactions an hour.
• There are over 100 million LINK cards in circulation from around 38 issuers and over 56,000 ATMs connected to the network, effectively every ATM in the UK.
• The LINK network is a fundamental part of the UK's payments infrastructure and cash machines are the most important method of cash withdrawal in the UK, used by millions of consumers every week.
• Growth in the number of ATMs, ATM transactions and the value of cash withdrawn from ATMs is expected to continue.