Cashzone has reduced the commission rates retailers receive on ATM transactions by 65% following a decline in withdrawals during the coronavirus lockdown.
Last month, retailers received letters from the company informing them that the reductions were effective from 1 April.
Better Retailing understands the commission rates offered by Cashzone vary for different retailers.
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One retailer said their commission has dropped from £1 to 35p per withdrawal as a result of the changes. Another store owner told Better Retailing their commission would reduce from 6p to 2p.
Retailers said they had received the letter weeks after the reduction in rates, receiving no prior warning from Cashzone.
Other store owners reported the withdrawal charges on their ATMs had also increased to £1.99 with no notice – an increase from the 95p charge introduced on 2,000 previously free-to-use machines at the start of last year.
Ian Handley, of Handley’s News and Convenience Store in Northwich, Cheshire, told Better Retailing: “This reduction will mean we will get rid of the machine. We’ve been with the company for six years and we have a lot of problems with it jamming, especially with the new £10 note. It’s just becoming a headache.
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“The number of transactions fell significantly after the charges were introduced. We were doing more than 1,000 transactions a month, whereas now it’s tailed right off. We do maybe 100 a month.
“It was another service we provided. We only received 5p a transaction when it was free, but it got people into the store. It put cash in their hands in the store.”
Handley added that Cashzone told him he had to add five years to his contract when he asked them for a new ATM. “They say it wouldn’t be viable for them without the fee, unless you have very high footfall,” he said.
A spokesperson from Cashzone’s parent company, Cardtronics, said: “As the impact of the virus and lockdown have taken effect, we have seen a decline in ATM transactions and an increase in the average transaction value.
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“All of these factors have an impact on the cost to process ATM withdrawals. Like many businesses in these trying times, we have had to make some very difficult decisions to protect our long-term future and ensure that as we emerge from the current crisis, we are in a good position to continue to provide access to cash for the communities we serve.
“None of the decisions we have made have been taken lightly and we appreciate the understanding and collaboration of our retail customers in helping us to protect access to cash for their customers.”
Find out more on our coronavirus information hub for retailers
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