Finextra News: Link rethinks business model as banks balk at ATM running costs

27th January 2017
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The UK’s Link ATM network is rethinking its business model as banks seek to reduce the costs incurred by providing free ATM withdrawals across the national network of 70,000 cash machines.

The total cost of the UK’s free to use ATM network is around £1bn, with Link member transactions coming in at around £750m. The nation’s banks have begun to balk at the cost, which equates to a 25 pence surcharge every time a customers uses a non-branch machine at another bank.

The issue came to a head at a crisis meeting of Link members this morning, called to discuss the scheme’s interchange and business model.

John Howells, chief executive of Link, says of the discussions: “Whilst commercial perspectives may vary, every Link member was clear at the meeting that ensuring the future of the Link Network and the cash access needs of UK consumers remains their number one priority.”

Independent ATM companies, which provide 57% of Britain’s cash machines, have warned that up to half of the nation’s ATMs could disappear from the high street unless a new deal can be agreed.

At today’s meeting, Link member banks agreed to convene a working group to explore alternative options to the current interchange arrangement, and will report back later this year.

In 2016, consumers made around 2.1 billion Link cash withdrawals amounting to £129 billion. The average withdrawal value is £69.

Says Howells: “Link will continue to work closely with its 39 members to keep regulators, government and consumer groups fully informed. The Link network continues to operate normally and it’s business as usual for consumers at all the UK’s 70,000 ATMs.”