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Death of cash is killing off free ATMs in Britain

·Head of Yahoo Finance UK
Customers us ATM cashpoints outside a HSBC bank branch in London. Photo: JUSTIN TALLIS/AFP/Getty Images
Customers us ATM cashpoints outside a HSBC bank branch in London. Photo: JUSTIN TALLIS/AFP/Getty Images

Free-to-use ATMs are disappearing across the UK, according to a study by a consumer lobby group.

Which? said that in the first three months of the year, nearly 1,700 cash machines started charging a fee for people to withdraw cash.

A company which runs most of Britain’s cash machines, Cardtronics, as well as NoteMachine, has also said it is likely they will start charging a fee at more machines.

Which? estimates that this will mean Britain will lose 13% of its free ATMs over the next few months. The fee to withdraw cash on each transaction — known as the interchange rate — ranges from 50p to £1.99.

The move comes after banks reduced the amount ATM operators get every time a cash machine is used. Banks have slowly been reducing payments from 25p to 20p per withdrawal over the past four years.

READ MORE: Fate of 1p and 2p coins to be determined this week

The decline of ATMs comes as the use of cash is increasingly dying out. The latest data from UK Finance in December 2018 showed that debit card payments (13.2 billion) overtook cash payments (13.1 billion) for the first time. Moreover, almost two-thirds of Britons now use contactless payments, and the number of payments has doubled in a year.

Card payments surged by 14% compared to the previous year. Meanwhile the number of cash transactions fell by 15% in the same period. Over the past decade, cash use has halved.

UK Finance CEO Stephen Jones claimed “we’re far from becoming a cash-free society,” but the popularity of cash is waning. This has become a major concern for an independent group reviewing consumer spending called Access to Cash.

In December, the group said that Britain risks “sleepwalking” into becoming a cashless society and that, in turn, creates huge problems for the millions of people who live in rural areas or are in a lot of debt.

“We haven’t taken a view in this report about the merit of a cashless society,” said the author of the report Natalie Ceeney, the UK’s former chief financial ombudsman.

READ MORE: EU’s Mastercard and Visa deal means it’ll be cheaper when you go on holiday

We haven’t concluded that it’s impossible, or even undesirable. But our research does show that if we fail to plan and prepare for it properly, a cashless society would do significant harm to the millions of people who would be left behind.”

Meanwhile, Britain will find out the fate of the 1p and 2p coins this week.

Just a year after chancellor Philip Hammond called the copper coins “obsolete,” it will be officially announced if they will be pulled from circulation.