The Payment Systems Regulator (PSR) has published a letter it has sent to the House of Commons’ Treasury Committee regarding the UK’s ATM network.
In the letter, the PSR responds to concerns raised by the Committee regarding the future of the UK’s free-to-use (FTU) ATM network and expectations of the PSR’s role in ensuring the interests of service users are not compromised by any changes to the LINK interchange rate. The PSR reiterates that its primary focus is to ensure that ATMs in the UK serve the needs of UK consumers. It has made clear to LINK, the retail banks and independent ATM deployers that consumers should be able to access cash through a widely spread geographic network of FTU ATMs and that this provision should be provided effectively and efficiently, meeting consumers’ evolving needs.
The PSR notes that the ATM sector has been, and continues to be, subject to significant changes as a result of consumers choosing to make payments in different ways. To understand how these changes may affect consumers, and to consider appropriate policy responses, the PSR has been undertaking a programme of work to provide it with insights into the ATM sector. As part of this work, the PSR has commissioned two independent studies of an exploratory and forward-looking nature:
- the first study, carried out by Europe Economics, considers the potential impact that any reduction in demand for ATM withdrawals and/or the interchange fee might have on the provision of FTU ATMs. The study highlights the difficulties in assessing the precise impact of any change in demand or interchange fees given the complex and dynamic nature of the market. However, it does provide useful insights into the broad magnitude of ATMs that could be affected and the extent to which the overall breadth of coverage might be at risk; and
- the second study explored the prospects for, and potential impacts of competition between ATM schemes. The study concludes that while greater competition between schemes is possible, there are a range of pros and cons associated with it. The PSR is, however, clear that whatever approach to scheme competition is taken, the market must be focussed on delivering for the consumer.
The PSR notes that it will continue to engage actively with LINK in the lead up to its decision and will intervene if it considers that any decision LINK makes is not in the interest of ATM service users.