If you find yourself hanging out at the small UK village and have no cash for the bus home – most likely, you’ll have a problem. In the thinly-populated areas, there are no bank-run ATMs. So if you’re a village resident – go out to the local shop and get your cash. No the other way round.
According to Link, the UK’s largest ATM network, cash machines are closing at a frightening number of 300 every month. Given this, rural communities are the worst hit.
Link is going to cut the fees it charges card owners to provide the service. Even so, it doesn’t make the whole cashpoint situation better.
Nearly 1,500 cash machines all over the UK were closed between November 2017 and April 2018.
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So what’s the reason?
Small transactions are on the rise, what appears to make cash less necessary. That’s the reason banks are cutting fees they pay for each cash withdrawal. This rule came into force on 1 July.
Campaigners believe that a planned cut in fees may hit the most hard-up the heaviest – the independent operators in rural areas.
What’s the consequence?
Thousands of cash machines could be changed for free-charging ones or removed completely. As you could guess, it may turn the UK streets into cash deserts.
The fee paid by banks for each operation will be reduced from 25p to 24p. The further reduction will come down to 20p.
Though the cut seems to be small, it has the potential to make many of the cash machines unprofitable, especially those in remote locations. According to Which, rural communities would have tough times, with bank branch closures also gaining pace.
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As Link puts it, the effect expected is a modest decline in the number of ATMs ‘in areas where they are heavily concentrated.’
Even so, the regulation may end up decreasing cash machines smoothly to zero.
According to Which, the pace of closures has picked up rapidly since 2015. In remote areas, the cutbacks are the deepest, even with Link’s promises to maintain access.
What’s the solution?
Though the regulation is intended to protect rural communities, it doesn’t seem to be doing so. Reducing the interchange fees in busy areas but increasing it in thinly-populated ones does not help matters.
Some people remain pretty suspicious about the regulation, believing banks do nothing but force people away from cash. Though the demand for credit card payments is growing, there is only a minority of completely cashless people.
Harry Rose, Which? Money editor says that initial impacts of these cutbacks are clear – as cash machines are shutting down at a record-breaking pace.
Rose believes the regulator should stop further closures. Otherwise, consumers could be stripped of an open access to cash.
Skeptics believe these regulations are all about cutting fees banks don’t want to pay. What do you think?