Half of ATMs will impose withdrawal fee within two years

Half of all cash machines will charge within two years, the banking payments trade body said yesterday.

The Association of Payment Clearing Services (Apacs) said that the overwhelming majority (7,200) of the 8,000 new machines that appeared in Britain during 2004 - the biggest increase of any year - imposed a charge to withdraw cash.

Fees are currently applied at about 40% of Britain's 55,000 cash-dispensing machines, but Apacs is now predicting that figure will rise to more than 50% over the next two years.

Despite the huge growth in their number, fee-charging machines still only account for a fraction of cash withdrawals. Last year Britons withdrew £155.7bn from non-charging ATMs, while £5.5bn was taken out from machines that typically charge £1.50-£1.75, but in rare cases impose a £10 fee.

The Apacs figures show the average withdrawal at free, bank-owned ATMs was £64 last year - this compares with £45 at a charging machine. Overall, £13,000 is taken out of each free machine daily, compared with £800 at fee-charging machines.

Apacs said the fact that many benefits were now paid directly into bank accounts had contributed to a 50% rise in the use of ATMs over the last decade - three-quarters of the population now regularly use them to access their cash. The number of withdrawals from cash machines reached 2.53bn in 2004, up from 2.37bn the year before. A trillion pounds has been taken out of British machines during the last decade.

A spokeswoman for Apacs said: "The figures show we're a nation of canny consumers who are well aware of which machines charge, so naturally we vote with our feet.

"This is neatly demonstrated by the fact that despite a large increase in the number of fee-charging cash machines, they still account only for a tiny minority of the total number of transactions - around 5%."

News of the predicted increase in the number of fee-charging machines will further concern members of the Treasury select committee. In March it published a report calling for stricter regulation of the Link network and said independent operators of ATMs - common in pubs, convenience stores and service stations - should be brought under the same scrutiny as banks.

It was particularly critical of the Post Office, which has installed machines across its network, thereby inducing pensioners and others on low incomes to pay £1.50 to gain access to their cash and benefits. The committee also called for a ban on machines that advertise "free" in bold lettering but in reality are only free for balance inquiries, not for cash withdrawals.

During the five-month select committee investigation, members heard of one ATM charging £10 to those withdrawing cash. Apacs said yesterday this turned out to be in a lap-dancing bar in central London, but failed to disclose the exact location.

· Independent cash machine operator, Bank Machine, announced yesterday that it had been bought by the American ATM operator Cardtronics for an undisclosed sum.

Bank Machine, previously owned by the European private equity firm Bridgepoint, will see the takeover of its thousand British ATMs, which are in venues including McDonalds, Spar, Post Offices, Tesco and motorway service areas. They charge users between £1.25 and £1.75 for a cash withdrawal.

Cardtronics said the deal made it the largest ATM sales and service provider in the world with 26,000 machines, of which 10,000 are owned and 16,000 are managed. It said it would use the acquisition to spearhead Bank Machine's European expansion plans. Its management and 50 employees will remain at its headquarters in Hatfield, Hertfordshire.