Banks 'working hard' to keep cash machines free

The operator of the UK's ATM network has said it is working hard to keep cash withdrawals free for millions of bank customers.

Fears have been expressed by some in the industry that a breakdown in the current agreement could result in more cash machines charging a fee.

LINK - which operates the network of 70,000 ATMs in the UK - said that its commercial model is "under review".

Some banks are thought to be unhappy about the fees they currently pay.

As a result all 38 members of the LINK network are due to have a series of meetings to try to reach an agreement, beginning next week.

At the moment around 75% of ATMs are free to use.

But Peter McNamara, the Chief Executive of Note Machine, a member of LINK, said that consumers could face being charged at many more of them.

"If the proposals that are being put forward by LINK went ahead, we estimate that you could be losing up to a quarter of the free-to-use ATM sites in the UK," he told BBC Radio Five Live.

Discussions

At the centre of the dispute are the so-called interchange fees. When a customer of one bank uses a cash machine belonging to another bank, the customer's own bank pays a fee to the operator, in the region of 25p.

It's thought that banks with a large number of card-holders feel they are being unfairly penalised.

"Some of the very big banks have a lot of cardholders who do a lot of transactions, and they feel that perhaps their share of what they are putting in the pot that pays for ATMs is disproportionate and potentially too high," said Mr McNamara.

"They may go outside the LINK mechanism to find a cheaper way of making those machines run, which is the risk in the system that could develop."

LINK said the discussions could take several months.

"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," a spokesperson said.

"We are working hard to avoid this situation."