FEARS that as many as 1,000 cash machines in Scotland could be axed have been raised as Scottish Labour MP Ged Killen today introduces a bill at Westminster to protect the free-to-use network.
Appearing before the Commons Scottish Affairs Committee, Stuart Mackinnon of the Federation of Small Businesses[FSB] in Scotland told MPs that between 500 and 1,000 Automated Teller Machines or ATMS north of the border could close over time.
"The impact of these changes could be compounded by bank branch closures. We know bank branches are closing faster in Scotland," he said.
But John Howells, Chief Executive of the Link network of cash machines, estimated that only one to five percent of ATMS could be lost in Scotland, which worked out at around 50 to 100 machines.
While he said the use of cash had been declining as more and more people opted to pay by card or made contactless payments, he pointed out the growth of ATMs in busy city centres was "not sustainable".
Mr Howells told the committee: "Our objective is to provide free access to cash. We have cut interchange in busy city centres where there is a growing proliferation of ATMs and we have increased interchange in remote and rural areas."
He stressed that he hoped this would "protect the free ATM network which we need to have in place in the country for decades to come".
However, the Link chief suggested that withdrawn cash machines could be replaced by other companies thanks to a system of subsidies.
He told MPs: "It's a competitive market. I am told by the deployers we speak to that if Link commit to putting up interchange in the areas such as the one kilometre-protected doughnuts around the busy city centres, that if an operator who has got existing machines feels unable to keep them open, they will be happy to go in at the subsidies we are proposing."
Yet Ron Delveno of the ATM Industry Association dismissed the idea, saying: "As for the subsidy, there's as much chance of the subsidy working as, say, Neil Lennon becoming manager of Rangers, frankly."
In the Commons today, Mr Killen, who represents Rutherglen and Hamilton West, will introduce his Banking [Cash Machine Charges and Financial Inclusion] Bill, to try to protect access to cash and banking services where demand remains for them.
The backbencher noted how recent evidence from Which?, the FSB and the committee’s own inquiry had highlighted how demand for cash and physical financial infrastructure remained and that that these services were important to people’s everyday lives.
“I accept that financial services are moving online. However, from the public reaction to a reduction in free-to-use ATMs and the current bank branch closures, it is obvious that these services are still valued and deserve protection,” explained Mr Killen, whose bill is only likely to become law if the UK Government backs it.
“By banning ATM charges and introducing stricter rules around access to banking we can focus on how we best provide these services where they are needed and for free. No one should have to pay to access their own money,” he declared.
Mr Killen went on: “We must act before we sleepwalk into a desperate situation. In the United States a similar change to how ATMs are funded has made it the case that the average ATM charge is almost $5 per withdrawal.”
He said his concern was that ATMs which charged a fee would become the norm on the pathway to a cashless society. This, the Scottish MP argued, would exact a harsh penalty on rural and deprived communities as well as the vulnerable and the elderly.
“When ATMs and bank branches disappear, lending to small businesses decreases, footfall on the High Street goes and the risk of financial exclusion grows. If we are serious about financial inclusion and economic development outside metropolitan areas, we should seek to protect the services people rely on,” he added.
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