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PSR responds to LINK's first ATM Footprint Report

Published 12 09 2018

Today LINK published its ‘Footprint Report’ showing the coverage of ATMs in the UK.

The report shows that, in line with the increasing use of card and digital payment methods and the declining use of cash, some ATMs – both pay to use (PTU) and free to use (FTU) - closed between 1 February 2018 and 1 July 2018, although LINK’s figures show the majority in well-served areas. The report showed that among those a number of ‘protected’ ATMs closed.

LINK is the UK’s largest cash machine network and almost every cash machine in the UK is connected to LINK. Whilst LINK does not operate the cash machines1, given the public commitments by LINK to preserve the broad geographic spread of FTU ATMs across the UK, we are concerned about the closures of protected FTU ATMs. Protected FTU ATMs are 1km or more away from another FTU ATM.  These closures took place prior to the reduction in interchange fees.

We have always been clear that we would take action if it is needed. To ensure LINK does meet its commitments we will now be developing a Specific Direction which will require LINK to fully develop its policies and processes for applying and implementing its commitments and to report to us on a regular basis.2

The PSR is also seeking renewed commitments from each of the banks that consumers will continue to be offered services allowing them to access their cash.

Our work with LINK

LINK provides its footprint reports to the PSR prior to their publication.  Since we received the first report, we have been working closely with LINK to understand why these protected machines could have closed. We also wanted to understand what LINK is doing now to ensure these protected machines are replaced and to ensure that LINK has suitable arrangements to maintain protected ATMs in future.

We have made progress in those discussions and are encouraged that LINK shares the PSR’s views on the importance of free access to cash, and on the need for a long-term sustainable solution set against the continued importance of cash, but declining use of ATMs. We are developing and setting out the direction which LINK would be required to comply with.

What the figures show

LINK’s latest figures show the following protected ATM closures between 1 February 2018 and 1 July 2018:

12 that were not accessible to the public (e.g. in a private business premises)

43 where a Post Office offering free cash withdrawal is available within 1km

21 that require further investigation or are targeted for replacement

Some of these closures, such as ATMs not accessible to the public, may be justifiable. We have asked LINK to review the closures and consider whether they can be replaced where needed, with a view to replacing them as quickly as possible.

For example, if the mitigation for an ATM closure is a nearby Post Office, then that Post Office branch must be a reasonable substitute in terms of accessibility and opening hours.

Hannah Nixon, the PSR’s Managing Director said:

“This highlights the challenges of maintaining a sustainable ATM network when the demand for cash is falling. In the short-term, free-to-use ATMs continue to play a vital role in helping people access their money. The requirements we intend to place on LINK will help ensure that LINK achieves their commitment to protecting the geographic spread of free-to-use ATMs across the UK.

“LINK should be in no doubt about the importance of this work. We will continue to work closely with its senior team to ensure these improvements are implemented as soon as possible.

“Our banks also play an important part in this, as they use the LINK network to help people access their cash. We are engaging with the banks to seek their renewed commitment to a widespread geographic network of free-to-use ATMs.

“We will continue our research to understand how people want to access cash in the future and the role of regulation in helping people do that.”

Looking to the future

In light of declining ATM usage, the PSR is continuing research with consumers, ATM operators, banks and other interested parties, and will work with representative organisations and government to look at the way people use and access cash. This will help explore and inform the long-term sustainable solutions to accessing cash and the role of regulation in achieving this outcome.

 

 

Notes:

  1. LINK provides a full overview of how it manages the UK’s ATM network.

  2. Specific directions are the decisions that the PSR adopts under the Financial Services (Banking Reform) Act 2013 which relate to individual named industry participants. A specific direction essentially requires the named participant to perform a certain action or actions to achieve a desired outcome.