Cardpoint to charge for withdrawals from more cash machines

Cardpoint to charge for withdrawals from more cash machines

About 250 cash machines formerly owned by HBOS will charge for cash withdrawals by the end of next September, part of a growing trend for customers to face a fee for their ATM transactions.

The machines were among 816 bought from HBOS, and rebranded, by the ATM operator Cardpoint earlier this year, but it will not be able to introduce charges for the rest of them as quickly as it had hoped. Cardpoint had expected to start charging between £1.50 and £1.75 per transaction at 406 of the machines by next September.

The slower pace of conversion means that the total cost of the acquisition will be £50m rather than £75m, although Cardpoint is expected to charge at more of the machines over time. It is already charging at 100 of the ATMs.

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As it announced a 203% rise in turnover to £36.8m and a pre-tax profit, before goodwill amortisation, Cardpoint committed itself to retaining some of the former HBOS machines as "free", provided they could be operated profitably.

To introduce charges, Cardpoint said it needed to persuade retailers to accept the fee, transfer the machines on to its technology and keep customers using the machines despite having to pay. The company said its customer retention rate appeared to be higher than the 40% it had originally anticipated and that it expected to levy an average charge of more than £1.60.

Cardpoint operates 2,800 cash machines, which dispense £300m a month. At the end of September there were more than 55,000 cash machines across the country. Some 33,000 of those are owned by banks and, on the whole, do not charge for cash withdrawals, while the other 22,000 are owned by companies such as Cardpoint, which charge for access to money and are more likely to be in places such as garage forecourts and village shops.

Apacs, which runs the payments system, says two banks - the Co-op and Alliance & Leicester - do have some charges to use their machines.

Since the first cash machines were opened by Barclays in 1967, their use has grown to such an extent that there are 75 transactions a second and £144bn is withdrawn from accounts through the hole-in-the-wall dispensers each year.

Apacs calculates that 97% of the withdrawals do not involve the customer having to pay.

Cardpoint also has 30 or so machines in Germany, where it charges about €3.50 (£2.60) for withdrawals. It hopes to have about 300 machines there eventually.

Guardian Unlimited © Guardian Newspapers Limited 2004