Where the Plans of LINK & Visa will Leave Cash in the UK? EXTINCT.

Posted on: 17/12/2017

If you live in the UK and don't already know that the LINK UK ATM Network is trying to arbitrarily slash interchange by 20%, you should not read on, because this issue, though vital to the future of the UK Public and economy, is clearly of no interest to you.

If you are still with me, you must realise the seriousness of the situation.

Despite the fact that the Bank of England recently announced that there is 10% more cash circulating in 2017 than there was in 2016, LINK claims that there are too many ATMs delivering cash to the UK Public. They claim there needs to be a reduction of 5000 ATMs, another completely arbitrary figure, though it happens to be almost exactly the increase in the total number of ATMs in the UK over the last decade.

LINK cash withdrawal interchange for an ATM not at a bank branch ( or Tesco or Sainsbury, but that is a long story!) is about 28p. Strangely, LINK claims it is 25p, but then transparency isn't great in UK financial services. The existing 28p figure is, by the way, one of the lowest paid anywhere in the world for ATM cash withdrawals 

Anyway, a 20% reduction in LINK Interchange would broadly reduce it to the same level as the interchange offered by Visa, which is 22.5p. Visa do not have any ATMs in the UK and their figure of 22.5p is entirely arbitrary ( do you see a theme emerging here?), so why should LINK pay it any attention?

Well, LINK says that if a reduction is not made in their interchange, effectively down to the Visa level, bank members of LINK, such as Barclays, HSBC, Lloyds, Royal Bank of Scotland and Santander, might leave LINK and process ATM transactions through Visa, the International Card Scheme . Which would mean that every time a card held by any customer of one of those banks was used at any ATM away from a bank branch for a cash withdrawal, the bank would pay only 22.5p, not 28p. 

The problem is that 22.5p is below the cost of delivering an ATM cash withdrawal away from a bank branch. So, effectively, it would plunge all such ATMs into a loss-making position. There are well over 20,000 of them and all would be under threat of being closed if they became loss-making thanks to arbitrary interchange manipulation. Many of these  free-to-use ATMs are operated by Independent ATM operators, not big banks.

So where is all this going? 

It would take many thousands of words to explain all the twists and turns of this situation BUT I will cut to the chase and be as brief as humanly possible!

* most banks do not want Independent ATM operators running free-to-use ATMs. Those banks do not want to pay the Independents for delivering a service to bank customers, a service they are seemingly unwilling to deliver themselves.

*most banks do not want to operate bank branches and certainly not away from the centres of big cities. They want to close as many bank branches as they can and remove the ATMs located in them.

* neither banks or Visa like cash. Visa have declared a "war on cash". Cash gives their customers many benefits but they make their not insignificant profits from card and internet payments.

* if LINK is allowed to make ANY arbitrary cut in LINK interchange, they will keep on making such cuts, chasing an ever-decreasing Visa interchange, until there are no ATMs away from bank branches in the UK, with the possible exception of ATMs at Tesco and Sainsbury  (which both have their own banks anyway) and some Post Offices.

* there will be no innovation at ATMs, which could replace bank branches as the providers of community financial services, if allowed to do so.

* the banking industry estimate that the UK may need as few as 4000 bank branches (there are currently about 8000), by as soon as 2020. Allowing some leeway on that timeline, lets give the banks until 2025 to reach their "target" of 4000 branches.

* bank branches currently have, on average, 2 ATMs. Lets assume the banks will be kind and allow this to creep up to an average of 3 ATMs per branch by 2025. So there will be 12,000 free-to-use ATMs at bank branches by 2025. Add to that Tesco and Sainsbury, who are likely to have about 6000 ATMs between them by then, the Bank of Ireland ATMs at Post Offices (around 3000 currently) and some "odds and sods" the banks keep for PR reasons eg at major Railway Stations and the total number of free-to-use ATMs in the UK by 2025 is unlikely to exceed 24,000, down from around 55,000 today.

* if you think that my figure of  24,000 ATMs by 2025 is too low, bear in mind that John Howells, the CEO of LINK, has been quoted as saying there will be NO ATMs by 2028 i.e.10 years from now.

* by 2025 there will be no bank branches or ATMs in most towns, villages and suburbs around the UK, except, as already stated, in the case of ATMs those located at Tesco and Sainsbury, and some Post Offices.

* by 2025, at the latest, Visa will be announcing a provisional date for the UK going cashless. Cash - both notes and coins- will have been made very inaccessible by then, thanks to the reduction in ATMs numbers and the absence of bank branches at which cash can be deposited. 

* by 2030, cash, which remains today the single most used payment method in the UK, is likely to be EXTINCT, pushed into that position by those currently in a position to heavily manipulate the "system".

None of this dismal scenario is inevitable, IF we can stop LINK making any arbitrary cut  in interchange NOW.

I have asked the Payment Systems Regulator, which oversees LINK, to intervene and order a fully independent inquiry to establish changes, if any, that might be appropriate in the methodology for calculating LINK interchange. The results of the inquiry must be subject to full public scrutiny and debate BEFORE any changes are contemplated. The Regulator should also be telling banks that they need to commit to LINK for a minimum of 10 years, whatever the outcome of the inquiry. The Public Interest demands such a step. Financial Exclusion will increasingly be the norm if access to cash is not maintained and improved.

On the political front, The Treasury Select Committee is looking into this matter. The Committee is keenly aware of the need to safeguard the Public Interest.

I have also briefed both the Treasury and the Cabinet Office on this issue.


Be very clear. I am NOT primarily expending all this time and effort to support the ATM industry.

ATMs just happen to be the best way of delivering cash to the UK Public.

It is OUR right to use cash that I am trying to safeguard. In the interests of personal choice, freedom and privacy. There are also very strong business and economic reasons for supporting cash as a payment method, but those arguments, in my view, do not have to be made at this stage.

The time has come for the UK Public to draw a line in the sand. We have seen our bank branches disappear. Now our ATMs and cash are going to be taken away from us.

Are we going to allow that to happen?




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