The UK non-profit consumers’ association, Which?, reports that up to 300’s ATMs a month are shutting down. Forecasting a total amount of 3600 by the end of 2018.
Which?, analyzed data from the UK’s leading ATM network – Link. The report showed that almost 1,500 ATMs had closed down within 5 months. 69,901 ATMs were in operation in November, but only 68,483 remained by April. In total that’s 2% of the UK’s ATMs.
However, ATMs numbers have been steadily decreasing since their peak at 70,500 in 2015.
What’s the reason for the decrease?
Interchange fees make many ATMs essentially unprofitable for banks. 97% of ATMs across the UK are free-to-use, which is ideal for the consumer but not for the bank.
But it’s about to become cheaper for banks to operate ATMs. On July 1st, 2018, a reduction from 25p to 24p will be introduced. The eventual goal will see the fee reduced to just 20p. Although it’s doubtful this will prevent the closure of ATMs operated by independent owners.
The popularity of debit cards is also a definitive reason for this decrease. UK Finance reported that debit card payments succeeded cash as the UK’s consumer favorite payment method in 2017. Paymentwall cited convenience as the main reason for this shift in payment behavior.
Could the idea of the UK becoming a cashless society become move from a theory to a reality? If ATMs continue to close at this rate it could take 20 years for the machines to become completely extinct. The ATM Industry Association estimates that the UK could lose anywhere between 25,000 to 30,000 of its ATMs by 2030 alone.
Currently, cash stands firmly as the UK consumers’ second preferred payment method. It is forecasted to remain second by UK Finance until 2027. After that, it wouldn’t be a surprise to the statistics if mobile payments or eWallets were to take its place.