The UK’s Treasury Committee has asked the UK’s cash machine network operator Link to give clarity on the proposed closure of cash machines across the country due to proposed reduction in interchange rates, which funds thefree-to-use ATM network.

According to ATM Industry Association, the changes proposed by the Link network could render parts of the UK into ‘ATM deserts’ as atleast 10,000 free-to-use cash machinesare at the risk of closure.

Currently, UK has approximately 70,000 ATMs, of which around 55,000 are free-to-use machines.

The committee’s chair Nicky Morgan has sought clarification from the network operator to provide details on how many ATMs are likely to close due to the proposed changes and how to ensure customers are not left in quandary.

Link has commenced a consultation on reducing the interchange fee from 25p to 20pthat card providers pay to ATM operators each time a customer withdraws cash from the machine.

Morgan warned that the closure of the ATMs is likely to negatively impact three million of the poorest Brits who depend on cash for their daily spending.

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In a letter to Sir Mark Boleat, who is chairman of the UK’s Link network, Morgan said: “LINK established its Financial Inclusion Programme as a result of an inquiry from a previous Treasury Committee into the provision of cash machines.

“The programme requires LINK to defend and improve access to cash for all UK consumers. Yet with the proposed 20% reduction of the interchange fee, it seems intuitive that some machines will become economically unviable.

“There have been concerns that the proposals could lead to ‘ATM deserts’ for communities. As the Bank of England’s Chief Cashier said, cash continues to play a key role for many, with 2.7 million people in the UK reliant almost entirely on cash transactions.

“I have asked LINK for assurances that the proposals will preserve the existing geographic spread of ATMs, and will have no negative impact on financial inclusion.”

In response, Boleat said: “LINK’s independent Board believes that reform is required to interchange and that it is currently too high. In particular, we do not see the growth of ATMs that is underway as sustainable, given the declining use of cash for making payments.”

Boleat continued: “We do not envisage any scenario where there will be areas of the UK which will not continue to have free access to their money.

“Our proposals include a strong Financial Inclusion Programme that will ensure that there is positive impact on financial inclusion.”

The consultation on the future level of the interchange fee will end this week and the results are expected to be published in January.