News

ATM cash withdrawals in U.K. dive

September 8, 2010

Cardholders withdrew fewer funds from ATMs in the United Kingdom during the second quarter compared with the same period last year because of the growing acceptance of debit cards coupled with fewer ATMs.

The Payments Council, which sets the strategy for UK payments, today reported cardholders withdrew 46.8 billion British pounds (U.S. $72.29 billion) compared with 48.4 British billion pounds (U.S.$74.77 billion) in 2009’s second quarter.

The council also reported there were 734 million ATM transactions in the second quarter compared with 740 million transactions in the second quarter of 2009. Average cash withdrawals during the second quarter, which includes April, May and June, also dropped to 64 British pounds (U.S. $98.87) compared with 65 British pounds (U.S. $100.42) for the same period last year.

One reason for the drop in ATM transactions and withdrawals was that there were fewer ATMs in England, Wales, Northern Ireland and Scotland during the second quarter compared with the same three-month period last year, said Mark Bowerman, a spokesperson for the council, which is based in London.

At the end of June, the Payments Council reported there were 62,238 ATMs, 1,440 fewer machines compared with 63,678 ATMs as of June 2009.

“A number of supermarkets, convenience stores and pubs went out of business during the recession, and many of those businesses had ATMs,” Bowerman said. LINK, a Harrogate, U.K.-based organization that represents ATM deployers, provided The Payments Council with ATM data.

At the same time ATM withdrawals were dropping, more U.K. consumers were pulling out their debit cards to pay for purchases. In the second quarter, the number of purchases made with debit cards was approximately 1.6 billion compared with approximately 1.5 billion in 2009’s second quarter, according to The UK Cards Association.

“Debit cards are taking over our daily purchases. We used cash less where there is an easy alternative, but we’re years away from cash falling out of fashion,” said Sandra Quinn, director of communications for the Payments Council.

Bowerman added more businesses are accepting debit cards, he said.

“Fast-food restaurants, taxis and dentists now accept debit cards. A few years ago, they did not accept debit cards,” Bowerman said.

Ron Delnevo, managing director of BankMachine Ltd., a U.K.-based ATM independent sales organization owned by Cardtronics Inc., said the results were expected.

“This is hardly surprising when card payments are in many instances being more or less forced on reluctant consumers or presented as the only fashionable means of making a retail purchase,” Delnevo said. “This seems somewhat perverse when contrasted with the British public’s long-held preference for cash.”

BankMachine owns 2,795 ATMs.

Cardtronics, which is based in Houston, is the world’s largest non-bank ATM deployer.