ATM network controller Link has cancelled some of the planned cuts to ATM interchange fees in order to protect the public’s access to cash.

Link announced in January 2018 that the interchange fees paid by banks to ATM operators would be slashed by 20% by 2021. While the first interchange fee reduction took effect on 1 July 2018, and another is planned on 1 January 2019, all further cuts have been postponed or cancelled.

Explaining the U-turn, John Howells, CEO of Link said: “Consumers are turning to alternatives to cash more quickly than expected and usage of ATMs is now dropping at 6% per annum. Link will therefore adjust interchange to maintain free-to-use coverage.”

The statement validates the warnings of groups including ACS, NFRN and Which? That said the fee cuts would lead to “ATM deserts” as shops ditch their cash machines or begin charging for withdrawals.

ACS CEO James Lowman welcomed the change but added that the existing changes had “already forced retailers to make tough choices about hosting ATMs in their stores”.

Research by Which? Found that 300 cash machines are being removed every month since Link announced the fee cuts last year. Cash machine operators have responded by putting small charges on previously free to use machines.

Following Link's U-turn, NFRN national president Mike Mitchelson said: “We would request that suppliers now desist from swapping free-to-use ATMs to pay-to-use machines in independent retailers’ premises and suspend trials of “lite” fees of between 50p and 60p.”

If Link's full fee cuts had gone ahead, it would save banks more than £100m a year, leading to reduced commissions for both ATM operators and store owners. The ACS predicted this would have put 20% of cash machines at risk.

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