Free Link ATMs could start charging for withdrawals

Thousands of Link cash machines could start charging for cash withdrawals because of a row among banks about paying fees to the ATM provider.

Banks and building societies such as Barclays, Lloyds and Santander want to reduce the fees they pay when one of their customers uses an ATM to withdraw cash.

The fee goes to the ATM operator and is used to maintain the machine.

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If you use a Lloyds bank card in a Barclays machine, for instance, Lloyds will pay a small fee to Barclays to cover the cost of running the ATM. Some of the banks believe they are being made to pay more than others for each transaction.

Denying cash to customers

Talks will begin next Thursday to try to resolve the dispute. If they fail, Link has confirmed that some of its free to use ATMs may start charging for cash withdrawals – or even deny cash to customers of rival banks.

This move would reverse the trend in recent years that has seen the number of fee-charging ATMs reduce from 27,000 at their peak in 2008 to around 18,000 today.

A spokesman for Link confirmed its commercial model is under review but stressed that changes “would not happen overnight”.

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He said: “We operate in a competitive market and there are other ATM networks in the UK available for card issuers and ATM operators if our model becomes unattractive. We are working hard to avoid this situation.”

What is Link?

Link is the UK’s cash machine network. It is connected to almost every cash machine in the UK and processes up to one million transactions per hour.

All of the UK’s main card issuers are members of Link, allowing their customers to withdraw cash from any Link ATM. They pay into the scheme based on a formula which takes into account the number of card-holding customers and their transactions.

All the main cash machine operators – banks, building societies, and shops – are also members of the Link network. They receive a fee for the upkeep of each machine.

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The network currently runs more than 70,000 ATMs across the country. Of these, 52,000 are free to use, and around 18,000 charge.

How are costs calculated?

Where the customer of one bank uses an ATM operated by another, a payment of around 25p is made from the cardholder’s bank to the other – regardless of the ATM’s location.

The amount each of Link’s 39 members pay is determined by a formula that takes into account the number of cardholding customers and how many transactions they make.

Some members say that the amount of money they pay is disproportionate to others, especially if they have a large numbers of cardholders relative to the number of ATMs they operate.

They argue that their rivals are charging them excessive fees and ignoring the different running costs of each ATM.