Bill aims to ban charges for using cash machines
NEW legislation is being presented in Westminster today in a bid to seek to abolish charges for using cash machines – as concerns grow about the numbers left in Scotland.
The Cash Machines Bill, if passed into law, would stop operators from charging consumers to use their ATMS and passing the costs of running these machines on to the consumer.
Margaret Ferrier, SNP MP for Rutherglen and Hamilton West, will present the bill – after discovering about the drastic loss of access to free cash machines in her area.
The Covid-19 pandemic is accelerating the shift to digital payments, as retailers and customers opt for card over cash.
Proponents of cash say small businesses, as well as elderly or vulnerable people who cannot use the internet, afford broadband for online banking or open bank accounts are at risk of being left behind.
Analysis by Cardtronics revealed that the number of free-to-use cash machines in Rutherglen and Hamilton West constituency had fallen by 24 per cent since July 2018.
This fall made Rutherglen and Hamilton West one of the worst affected constituencies in the UK for loss of access to free cash machines.
And the coronavirus pandemic
has made the situation even worse. Data from ATM operator LINK reveals that cash withdrawals fell by 60% during April 2020, compared to the same period last year. Between March and May 2020, six free-to-use cash machines closed in the constituency.
“Keeping free cash machines open is not just about helping those on low incomes, it’s about ensuring that an essential form of payment remains available for the future,” Ms Ferrier said.
“There is no doubt that contactless and digital payments are becoming more popular, but many people will continue to rely on cash and will use cash machines for some time to come. The pandemic has not changed the underlying reasons why people will opt to use cash.
“For many people, charges put them off the convenience of using cash. £1.99 spent withdrawing cash is £1.99 that could be spent supporting small business and getting the economy moving faster into recovery from Covid-19.
“My bill highlights the need for this vital part of our financial infrastructure to be protected in law, to avoid the wholesale loss of these free machines in the same way that has happened to community bank branches across Scotland.”
The Herald revealed in January that one in four of Scotland’s cash machines are now charging customers, with the number soaring by 68% in just one year.
Figures from the UK’S largest cash machine network revealed that there were at that point 1,396 pay to use ATMS in Scotland – 565 more than the previous year.
The falling number of cashpoints is seen as a concern for elderly or vulnerable bank customers who do not use online banking, and for small businesses who rely on access to cash. Scotland has already seen more than 400 bank branches close since 2015, making it one of the worst affected areas in the UK, and often the cashpoints will also go.
Banks that have made the cuts consistently say that it is the result of customers preferring to use online, mobile or telephone banking while usage of branches has fallen.
Last month proposed rules from banking regulators, the Financial Conduct Authority, stated that banks and building societies will have to alert them if they plan to close branches or cash machines and must prove they considered the impact on consumer access to cash.
Under the draft guidelines, lenders will also have to show they have explored alternatives to support cash access in areas affected by the closures. Alternatives could include mobile banking hubs, cash delivery, commissioning free-to-use ATMS, and will have to be clearly outlined to customers at least three months in advance.
The guidelines – which are up for consultation but could be in force by December – will ensure people can continue to withdraw and deposit cash, and make cash or cheque payments for mortgages and loans. Firms that breach the guidelines would face enforcement action, including fines.