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Cash controversy: The High Streets with too many ATMs

From BBC - December 15, 2017

Shoppers in Gallowtree Gate, in the centre of Leicester, should never find themselves short of cash.

Within a five minute walk they can find no fewer than 68 cash machines, or Automated Teller Machines (ATMs) as they are more properly known.

Including machines inside the banks themselves, there are 41 within a minute of each other, the highest concentration of ATMs in the UK.

The proliferation of ATMs costs banks a fortune, as they typically have to pay 25p for each transaction an account holder makes, a sum known as the interchange fee.

But more than that, the issue of ATMs has become the subject of a furious dispute, with allegations of profiteering, deception, and even delusion.

The industry is accusing Link - which manages the ATM network - of trying to close down tens of thousands of machines.

Link says it is merely trying to preserve ATMs in remote areas, while removing unnecessary machines in places such as Leicester.

As shown in the chart above, the number of free-to-use ATMs in the UK has grown rapidly over the past decade, to 55,000.

Running the machines has proved highly attractive to independent operators, who run as many ATMs as the banks.

Cardtronics, a US firm, made pre-tax profits of 46m in the UK last year, while Notemachine made 14.7m.

"When I look at the country, what I see is a very rapid increase in city centre ATM numbers, which is not doing anybody any good, except possibly making money for ATM operators," said John Howells, the chief executive of Link.

Shoppers in Leicester seem to agree.

"There's probably not the need for as many as there are now, so to reduce them down, that probably would not be a bad thing," said Paula Derbyshire.

"We do not need them all."

Independent operators - and banks other than your own - receive 25p from your bank each time you withdraw cash.

Link believes it can reduce the incentive to put ATMs in city centres, by gradually cutting that fee, over a five year period, to 20p.

But that idea has been met by a stream of vocal objections from the operators themselves.

Ron Delnevo, the executive director of the ATM Industry Association (ATMIA), has accused Link of concocting a plan to make cash less accessible.

"We are going to grumble, we are going to shout, we are going to scream, and we are going to blow their ivory towers down," he told the BBC.

"While I have still got breath, this will not happen."

ATM Locator

To locate your nearest cash machine, click here.

ATMIA estimates that tens of thousands of ATMs could be removed, including the loss of machines in bank branches which are due to close.

However, Link says the total number of free-to-use ATMs will only fall by 5% over the next two years - as a result of lower interchange fees.

Small towns

'Painful debate'

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