Cash machines

By THIS IS MONEY
Updated: 06:13 EST, 13 August 2010

The Daily Mail City team looks at the rise of cash machines which charge users to obtain their cash, and why it's proving lucrative for the likes of operator Paypoint.

I like money

As do we all. So much so there's a whopping 63,000 Automated Teller Machines, or ATMs, across the land distributing £2.9bn cash every year.

We've come a long way since Reg Varney became the first person to use an ATM in the UK way back in 1967 in Enfield, North London.

And?

ATMs are big, ahem, money makers especially since 1999 when rules were relaxed which allowed ATM owners to start charging a few quid for the privilege.

Today 40% of all ATMs demand a fee.

How does it work?

Companies rent out ATMs to shops, pubs and nightclubs, charging rent and taking a fee every time someone wants their money.

Last year £92m was withdrawn this way. One of the biggest operators, Paypoint, which owns 2,360 ATMs made a cool £1.6m in rental income alone last year and interim results saw operating profits increase 1.2% to £34m.

Wasn't there a fuss?

There was indeed. In 1999 Barclays tried to charge its customers a £1 'disloyalty fee' every time they used an ATM operated by another lender. Its rivals threatened similar charges.

Public pressure force the banks into an embarrassing U-turn, and in 2005 legislation tightened up, forcing any ATM that wanted to charge a fee to display the cost on screen.