Banks in talks over free-to-use cash machines

Customers may be charged to withdraw cash if Link members reject system of sharing costs

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A row between British banks over free-to-use cash machines could drag on for months, with MPs set to intervene if lenders start charging customers to withdraw money.

The 39 members of the Link network are locked in talks over how to fund the tens of thousands of ATMs, which cost £900 million a year to run.

It is feared that customers could be charged to withdraw cash if Link members reject the current system of sharing the cost of operating the network.

Link members - including major high street banks - are due to meet on Thursday, but the organisation has ruled out a quick solution and expects talks to spill over into March.

"Link's commercial model is under review," a Link spokesman said.

"The contractual discussions are complex by nature, with many interested parties, and while they are unlikely to be resolved in the coming days, Link will be working hard to resolve this in the next couple of months."

More than 70,000 cash machines are connected to the Link network, with 16,000 charging for withdrawals and 54,000 operating as free to use.

The average cost of a pay-to-use cashpoint is £1.70, but around 220 ATMs charge more than £2 for services.

It has been reported that a quarter of cash machines could charge customers as much as £2.50 to withdraw their money if the current system is rejected.

Andrew Tyrie, chairman of the Treasury Select Committee, told The Times that it would have a "considerable" impact on customers, especially poorer ones, if banks start charging for cash withdrawals.

"Were widespread charging to return, the Treasury committee would almost certainly want to investigate.

"The public detriment - especially for the least well-off - could be considerable."

MPs are also concerned about the rising number of bank branch closures in the UK, which have left some communities with little or no over-the-counter services.

Unite the union revealed on Wednesday that Clydesdale and Yorkshire Bank will close 79 branches with the loss of more than 400 jobs.

Britain's banking giants have been cutting costs by shutting branches or selling non-core operations after seeing their profit margins eroded by ultra-low interest rates.

A spokesman for Link added: "If any changes occur as a result of these discussions they would not happen overnight and we will make sure customers are kept informed."