Is this the end of hole-in-wall cash machines?

THE free-to-use cash machine network faces collapse within two years without Government action, it is claimed.

The consumer group Which? says the law must change to force banks to maintain the system.

An estimated 9,500 free ATMs have been removed or introduced charges of up to £2 since January 2018.

As a result, fees paid by the public to access their cash have risen from £29million a year to £104million. At the same time hundreds of bank branches have put up the shutters in what Which? describes as rampant closures.

Banks are pushing people to switch from cash to cards and smartphone apps such as Apple Pay because it saves them the costs of handling, security, counting and transport costs.

The closure of free cash machines follows a decision by banks to reduce their payments to third party companies to handle transactions. This made many machines no longer economically viable so they were removed or charged for.

The network is administered by LINK whose chief executive, John Howells, said: ‘LINK, with the banks’ support, has maintained free ATM coverage so far and will be able to continue to do so for the next year or two, but without Government support the infrastructure will start to fall apart.’

The banks’ trade body, UK Finance, said the industry ‘recognises the importance of ensuring cash remains free and widely available for those that continue to need it’, and said it has introduced ways to achieve this, particularly in rural areas.

Ahead of the Budget, Which? has written to the Chancellor calling for legislation to protect free access to cash.

Gareth Shaw, of Which?, said voluntary measures – such as allowing communities to bid for an ATM, subsidised by a fund set up by banks – ‘just aren’t enough to help the countless communities crying out for free access to cash’.

Mike Cherry, chairman of the Federation of Small Businesses, said: ‘Cash remains the payment method of choice for millions of small business customers. When bank branches and ATMs are lost that hurts footfall and cashflow in local communities, making it harder for small firms to compete.’

Which? research found areas where free-to-use ATMs have significantly declined, including Ward End in Birmingham where there is now just one, down from 11 two years ago.

Similarly, Sparkbrook and Balsall Heath East, also in Birmingham, has three down from 19, and East Ham North in London has two, down from eight.

And Royston Heath in North Hertfordshire, East Malling in Kent and Essington in South Staffordshire, which all have populations over 5,000, have lost access to a free machine.

Between January 2018 and December 2019 the number of free-to-use ATMs reduced from 54,500 to 45,000. In that time 1,203 bank branches closed.