‘Super premiums’ will help protect ATMs in remote areas - Link

Link, the UK’s main cash machine network, said a new super premium will be paid by banks to ATM operators in some places where cash machines are situated in remote and less well-off parts of the country.

ATM operators will receive enhanced premiums of up to £2.75 each time someone withdraws cash from an eligible machine under the changes.

Around 1,000 cash machines will initially be eligible and the enhanced premiums will vary in size depending on how well a particular ATM is used.

Currently, operators of eligible ATMs receive a top-up subsidy of up to 30p through Link’s financial inclusion programme.

Payments are in addition to the interchange rate - the fee card issuers pay to ATM operators.

The new enhanced premium means an operator could potentially receive as much as around £3 when someone takes out cash when the super premium and interchange rate are added together.

Link expects the super premiums, which take effect from April 1 2019, could also lead to some cash machines which currently charge consumers to withdraw money being converted to free-to-use ones.

The move follows a row over plans for a phased reduction in interchange rates, which led to fears that “cash deserts” could be created as more cash machines may no longer be viable.

There are more than 50,000 free-to-use ATMs across the UK - and the vast majority will not be eligible for the new super premiums.

Currently, around 3,500 ATMs are protected - because they are more than 1km (0.6 miles) away from the next nearest free ATM or they are located in particularly deprived parts of the country where access to cash is vital.

These ATMs were ringfenced from the reforms to interchange rates due to playing a key role in continuing people’s access to cash.

Of these protected ATMs, around 1,000 will initially be eligible to receive the premiums to help keep them open - but it is thought that more of the 3,500 protected ATMs will be eligible over time as cash withdrawal volumes at ATMs fall.

Link chief executive John Howells 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.”

Federation of Small Businesses chairman Mike Cherry, said: “A lot of remote, vulnerable communities - where a high proportion of shoppers want to use cash - are having to battle bank branch closures alongside Link’s cuts to cash machine funding.

“Reduced cashflow in these local economies hurts footfall on high streets and restricts economic growth.”