UK Payments Association The Way We Get Cash A report into cash machine use in the UK during 2004 Contents Foreword 03 The cash machine customer 04 Cash machines in the UK 06 How we get cash 08 Fighting cash machine crime 10 The future 11 ISBN 0 903689 72 3 Copyright on this document lies with APACS (Administration) Limited It must not be copied in whole or in part without the express permission of APACS (Administration) Limited. While every effort is made to ensure the accuracy of any information or other material contained in this document, it is provided on the basis that APACS (Administration) Limited (and APACS and its members either individually or collectively) accept no responsibility for any loss, damage, cost or expense of whatsoever kind arising directly or indirectly from or in connection with the use by any person of any information or other material contained herein. Any use of the information or other material contained in this document by you shall signify agreement by you to this provision. If you do not accept these provisions then you should inform us by returning the document to us within seven days. © APACS (Administration) Limited 2005 THEWAYWEGETCASH_03 Foreword Welcome to The Way We Get Cash, the annual review into how the British public gets hold of its money and, in particular, uses cash machines. Produced by APACS, the UK payments association, this report sets out key data on the use and role of cash machines in Britain today. Since the first cash machine withdrawal was made (by On The Buses actor Reg Varney, on 27 June 1967), we have come to depend on cash machines as the main way we acquire cash. Cash machines are part of everyday life and over the last 38 years we have become used to getting cash whenever and wherever we want to – not just when our banks and building societies are open. Over the last ten years cash machines have paid out more than £1,000,000,000,000 (or £1 trillion) to the public. Cash machines now provide us with more than half of our cash and nearly 33 million people are regular users1. Last year we withdrew £5,114 from cash machines every second. Importantly, 96.6 per cent of the £161.3 billion withdrawn from cash machines in 2004 was withdrawn free of charge. There was a record increase in cash machine use in 2004 with the number of withdrawals growing societies that APACS represents and those by 155 million and the total value of transactions provided by independent companies, which rising by £17.1 billion. This is due, in part, to the typically charge to withdraw cash. The industry continuing trend of more people using cash has accepted and engaged with this scrutiny machines more often and one-off factors such and where we believe that better policies are as the introduction of Direct Payment of benefits required we have acted. and pensions into bank accounts rather than This report looks at the characteristics, over-the-counter in post offices. Changes like behaviour and experiences of the average cash these have made cash machines as much of an machine customer and provides information on issue of social inclusion as of convenience. cash machines in the UK. It also looks at the Last year also saw the cash machine network different ways we get cash; the industry under scrutiny on issues of transparency and initiatives to make cash machines safe and access, in particular from the Treasury Select secure against crime; and the future of the Committee. This has focused both on cash cash machine network. machines provided by the banks and building We hope you enjoy reading it. 1 Using a cash machine every three months or more often 04_THE WAY WE GET CASH The cash machine customer The world’s first cash machine opened in Who uses cash machines? Enfield, Middlesex in 1967. Since then, the UK’s population has taken the cash machine to its More than seven in ten of us – 74 per cent – use heart, so that by the end of 2004, 32.9 million of cash machines regularly. This figure has risen us were using them regularly with our plastic steadily over the last decade, from around 53 per cards to withdraw cash, check our balances, and cent in 1994. The highest level of use occurs in deposit cash and cheques, as well as access the 25 to 34 year old age group, with 88 per cent other newer services such as topping up our of this group using cash machines to get at their mobile phones. cash. More than half of this group – 60 per cent – use cash machines once a week or more. From one lone terminal in Enfield, the UK now boasts thousands of machines from the Use of cash machines is lowest amongst those Shetlands to the Channel Islands. And it’s not aged 65 and over, although perhaps hard to understand why we’ve taken to cash surprisingly more than half of this group – 56 machines so readily. They are quick, convenient, per cent – use them to access their cash, with reliable and operate around the clock. almost a quarter (23 per cent) using them once a week or more on average. We are also able to use our cards in the same way with the same four-digit number in cash machines There is almost no perceptible gender difference right across the world thanks to the global in cash machine use; 74 per cent of women use agreements between card schemes, banks, cash machines as against a marginally higher 75 building societies and other card issuers – per cent of men. Figures for frequency of use by and wherever we are the cash machine will males and females are almost identical. speak to us in our own language. THEWAYWEGETCASH_05 Cashing in across the board Withdrawals per cash machine per annum Cash machines are used right across all social 80 groups, with use highest amongst ABs – with 88 70 per cent of people in these groups using cash 60 machines. This figure drops slightly with each 50 s social class grouping, with cash machines used by d n a s 40 only a small majority of Es (52 per cent). However, u o h this marks a significant drop – 15 per cent – t 30 compared to social class D (67 per cent usage). 20 As increasing numbers of people in social 10 groupings D and E open bank and building 0 94 95 96 97 98 99 00 01 02 03 04 society accounts, particularly in relation to the Banks and building societies payment of benefits, the number of people able Independent ATM deployers to use cash machines is rising. The Department for Work and Pensions indicated that an at 59 per cent, or 54 per cent by value. additional 5.3 million benefit payments were Interestingly, when we use a cash machine made directly into bank and building society owned by a different bank we tend to withdraw accounts during 2004. less – an average of £54 compared to £72. Ready access to our readies Overall, the average withdrawal made at a cash machine owned by a bank or building society is It seems we are more than happy to get our cash £64. This figure drops quite significantly to £45 at any time from anywhere and everywhere – for withdrawals at IAD machines. and although there has been a significant growth in the number of independently-owned cash A considerable number of people have now machines (known in the industry as IADs or begun to withdraw their benefits from cash independent ATM deployers), we still obtain the machines in a single transaction, contributing to vast majority of our cash – 96.6 per cent by value, the increase in the average value of transactions from 95.1 per cent of all transactions – from free- between 2003 and 2004, up around £3 from £61, to-use bank and building society-owned after year on year rises of just £1 between 2001- machines. This is illustrated neatly by the volume 2002, and 2002-2003. of cash typically withdrawn from each machine – averaging £13,000 per day at bank and building society owned machines, and only £800 per day at IAD machines. However, our loyalty to our own bank or building society machines has been dropping – transactions at machines not owned by the same bank that issued the card being used now stand 06_THE WAY WE GET CASH Cash machines in the UK Cash rich, time rich 25 Density of cash machines per 100km2 – 2003 Last year saw the largest annual increase in the 4 0 0 20 2 number of cash machines across the UK, with s e n i h both the bank-owned estate and the IAD estate c a 15 m h reaching record numbers. With more machines s a c f in more places, an increasing number of the o r 10 e b population have greater access to their cash, m u N and at times that are convenient, than ever 5 before. By the end of 2004, a total of 54,412 0 cash machines were in operation – that’s almost Spain Germany UK France Italy 8,000 extra machines since 2003. 55 Number of 40 On-site and off-site cash machines cash machines 50 s s d d n n a s a 30 s u u 45 o h o t h t s e s n e i n h i 40 c h a 20 c m a h m s h 35 a s c a f c o f r o e 10 b r 30 e m b u N m u N 25 0 20 94 95 96 97 98 99 00 01 02 03 04 94 95 96 97 98 99 00 01 02 03 04 On-site (at banks and building societies) Number of cash machines Off-site (at remote and convenience locations) Social and leisure locations, including pubs, Number of cash machines per one million inhabitants bars, nightclubs, newsagents, corner shops and off licences, have been some of the biggest areas of cash machine growth.