Taking effect from 1 April 2019, the premium will be made available to around 3,500 potentially eligible free-to-use ATMs that are currently 1km or more away from the nearest free-to use ATM or form part of LINK’s Financial Inclusion Programme, which safeguards free-to-use ATMs in remote and deprived areas. It is expected that approximately 1,000 of these ATMs will initially be eligible to receive a premium but this is likely to increase as cash withdrawals at ATMs continue to fall.
Currently, operators of eligible ATMs receive a top-up subsidy of up to 30p through LINK’s Financial Inclusion Programme. This payment is in addition to the interchange rate which is the fee paid between card issuers and ATM operators. The enhanced premiums will vary in size depending on how well used the ATM is, but operators of ATMs in certain locations will benefit by payments of up to the £2.75.
The super premiums will also be made available to operators who install new free-to-use ATMs or convert existing pay-to-use ATMs to free-to-use and this provides free access to cash where it did not previously exist in areas that form part of the Financial Inclusion Programme.
The £2.75 per cash withdrawal is in excess of the price charged to consumers by an average pay-to-use ATM, so there should be no economic need for an operator to turn a free-to-use ATM in a remote or deprived area into a pay-to-use machine. As an additional benefit, LINK also expects a number of existing pay-to-use machines to be turned to free-to-use given the new super premiums available to the operators of these machines.
John Howells, Chief Executive of LINK said: “We are delighted to announce this increase in financial support for ATMs in remote and deprived areas that provide a vital service to communities. While many consumers are turning to alternative payment methods such as contactless cards, it is vital we continue to provide free access to cash to those who need it. These premiums will further safeguard ATMs in remote and less well-off areas and the LINK Board will regularly monitor their effectiveness and in the context of the recommendations shortly due from the independent Access to Cash review and make changes as appropriate.”