Cash machine charges ‘could be outlawed’
PLANS to charge people for taking their own money from cash machines could be banned under a new law.
Banks could face tough financial penalties for charging customers to take out money from automated teller machines (ATMs), with a Bill outlawing the practice to be introduced in Westminster.
The move was announced yesterday as business chiefs claimed one in three firms could lose customers with closures of bank branches and cash machines across Scotland.
The House of Commons Scottish affairs committee yesterday questioned experts on changes to Scotland’s ATM network, which could see a sharp decline in the availability of free machines.
Fears have been raised that this, along with RBS branch closures, could leave rural and vulnerable customers unable to access cash – while businesses fear a reduction in footfall and spending.
Labour MP Ged Killen will today introduce a Member’s Bill in the Commons in a bid to ban ATM charges as he believes the UK could be ‘sleepwalking’ into a situation where people have to pay for their own cash.
Mr Killen wants to outlaw fees. He said: ‘By banning ATM charges and introducing stricter rules around access to banking, we can focus on how we best provide these services where they are needed and for free. No one should have to pay to access their own money. We must act before we sleepwalk into a desperate situation. In the United States, a similar change to how ATMs are funded has made it the case that the average ATM charge is almost five dollars per withdrawal.
‘My concern is that ATMs which charge a fee will become the norm on the pathway to a cashless society. When ATMs and bank branches disappear, lending to small businesses decreases, footfall on the high street goes and the risk of financial exclusion grows.’
If passed, the Banking (Cash Machine Charges and Financial Inclusion) Bill would bring a legal requirement for free access to cash where there is a demand for it. The Bill is being brought in amid concerns that changes to the funding formula for ATMs could result in the loss of thousands of free-to-use cash points.
Stuart Mackinnon, external manager of the Federation of Small Businesses Scotland, gave evidence at the Scottish affairs committee yesterday, where he claimed one in three businesses fears the closure of free ATMs in Scotland.
He claimed some firms estimate they could lose more than £50 a day as a result.
Mr Mackinnon said: ‘The impact of these changes could be compounded by bank branch closures. We know bank branches are closing faster in Scotland.’
John Howells, chief executive of the Link network of cash machines, said that up to 100 free-to-use ATMs could be lost in Scotland as interchange fees – which fund the ATM network – are being reduced by 20 per cent over four years.
Tory MP David Duguid said: ‘Scottish high streets are already being hammered by business rates and Sturgeon’s slow economic growth.
‘The decrease in ATMs across Scotland, and especially in rural areas, will only decrease footfall in high streets, having an adverse effect on the profitability, which could add to already declining high streets.’
‘No one should have to pay’