The Government yesterday said it did not think free ATMs in the UK were under threat from companies that charge consumers to get their hands on their cash.
In its response to a report on the issue by the Treasury Select Committee, the Government said there were more than 30,000 ATMs in the UK that were free to customers from all banks and building societies, and that 96 per cent of all withdrawals made from cashpoints were free.
But it added that it was important for people in all communities to have free access to their cash, and it would be monitoring the impact of charging machines on vulnerable and low- income consumers.
It welcomed the introduction of fee-charging machines, claiming they had bought greater competition to the market and made it easier for people to access their money.
It said the vast majority of the 20,000 fee-charging ATMs were in locations where there had previously not been a cash machine.
At the same time it claimed where fee- charging machines appeared alongside ones that were free they offered consumers a genuine choice, for example, avoiding having to queue by opting to pay for their withdrawal.
However, the Government said it would be concerned if there was evidence that fee-charging machines were displacing other ATMs leading to a reduction in the overall number of free cashpoints.
At the same time it said where the machines were placed in areas where there was no free ATM it would be concerned if there was no other free means of obtaining cash, such as over the Post Office counter or through cash-back at supermarkets and shops.
It also stressed that cash machine charges should be clear so that consumers could make an informed choice and it welcomed moves by cash machine network LINK to crack down on ATMs that did not display their charges clearly. The response came as the Post Office announced it was to install free cash machines after signing a deal with the Bank of Ireland.
It also said it planned to stop entering into contracts with fee-charging ATM suppliers.
The Post Office was singled out for criticism in the Committee's report for installing charging ATMs, with MPs concerned that 1,820 of the Post Office's 2,500 ATMs charged customers to withdraw their money, although people could still make free withdrawals over the counter.