On 1 July, Link set in motion the first of four years of cuts to the interchange fee for cash machines. The reduction of 5% per year will see interchange fees fall from 25p to 20p in 2021.

Link, which operates on behalf of the big banks, is taking this action to try and reduce the total number of cash machines in operation, but has claimed that this won’t affect those in rural or isolated areas due to their ‘Financial Incentive Programme’. So, what is the real impact of
Link move? 

Retailers are telling us that when Link’s plans were announced, they started to think more carefully about whether or not they would be able to continue offering a cash machine in their store. While a reduction of 1.25p per transaction per year doesn’t sound like a lot on paper, it can absolutely make the difference between a cash machine being profitable and being unviable. For retailers that offer these machines at the front of their store, or through the wall, there is also the massive cost of business rates which can often be more expensive than the rates bill for the entire rest of the store.

What is the real impact of Link’s move?

Access to cash is essential for customers of convenience stores. It helps to circulate cash in the local economy with market traders and other small businesses that aren’t set up to take card payments, and enables the 2.7m people who rely on cash for all of their payments to have access to their money. The net result of Link’s decision is that cash machines are already being removed from stores in both urban and rural areas, which will be to the detriment of local people and businesses. We don’t believe that the ‘Financial Inclusion Programme’ is effective, transparent or being used appropriately, and our concerns are shared by Government and other organisations like Which?
and the FSB.

If Link’s cut to interchange fees has led to you having to remove your cash machine, we want to hear from you. Email steve.dowling@acs.org.uk, as it will help us in making the case to the Payment Systems Regulator that they need to intervene.