NoteMachine calls on regulatory authorities to reverse link interchange cuts

NOTEMACHINE CALLS ON REGULATORY AUTHORITIES TO REVERSE LINK INTERCHANGE CUTS Which? research shows urgency of action to protect free access to cash. NoteMachine has today welcomed the publication of Which?’s research into the threat posed to the UK’s free access to cash network. The reduction of the LINK interchange fee has put extraordinary pressure on independent ATM operators, making many free-to-use ATMs economically unviable. NoteMachine has fought to operate on a free-to-use basis, even in the face of rising commercial pressure on its network. Unless urgent action is taken to reverse the interchange fee reductions of the last year, NoteMachine will be forced to revaluate the commercial viability of maintaining widespread free-to-use cash machines. A decision will soon need to be made on whether NoteMachine can continue to operate on its free-to-use model, which could mean thousands of ATMs are forced to charge for withdrawals. NoteMachine believes that the regulatory authorities must intervene to avert disaster. Regulators must make LINK address the consequences of its previous actions, cancel the third planned reduction of the interchange fee and reverse the previous reductions. Any further drift along the current slippery slope will ensure the effective ending of free access to cash, which, as this report makes clear, is vital to millions of consumers throughout the UK, and both the most vulnerable and isolated in society and as well as the majority of consumers that need to budget carefully. Peter McNamara, Chief Executive of NoteMachine, said: “The research from Which? very effectively illustrates the grave situation facing the UK’s free access-to-cash network. The reductions in the interchange fee have forced ATM operators to reconsider the economic and commercial sustainability of maintaining a free-to-use network. This is not about marginal shifts in the amount of income derived by ATM operators from each transaction. The whole LINK system is now under severe threat from a toxic combination of wholesale bank branch closures, the unavoidable shift of many free-to-use machines to a charging model, and the mothballing of low volume machines which are no longer economically viable under the charging regime. The impact on consumers is already severe, and demonstrated in a decline of approximately 10% in the number of free ATMs over the period since the interchange cuts were introduced. This in turn has significantly increased the cost to independent operators of fulfilling each individual transaction, creating a vicious circle which is forcing many operators to close machines or move them to a charging model. As yet, we have not done the same – NoteMachine has always operated a free-to-use model wherever possible and we believe very strongly that ATM cash is a public utility which should be preserved as free-to-use for the benefit of the millions of consumers who have to depend on cash, both as a budgeting mechanism and for their day-to-day transactions. All regulators, market participants and financial commentators agree on this basic principle. However, unless urgent action is taken to reduce the pressure on ATM operators by reversing the interchange fee reductions, NoteMachine will be forced to begin converting ATMs to surcharging. This is a dilemma we have been grappling with for some time and are extremely reluctant to make such a decision. But the current situation, which we also argue is the direct result of actions which fundamentally contravene existing competition law, cannot be allowed to continue. If it does, the whole system will collapse. This Which? research highlights the importance placed on free access to cash for all consumers and especially for vulnerable and isolated people, and it is NoteMachine’s hope that the regulatory authorities, who have so far stood by and allowed LINK to create this problem, will now take notice”.

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