Speaking at the second hearing of the Treasury Select Committee's investigation into cash machine charges, Mr Crosby, the head of Britain's fifth-largest banking group, conceded the growth in fee-charging machines was likely to continue to outstrip the much slower growth in free ATMs. This meant the proportion of those charging would soon rise from 40 per cent to 50 per cent or more, he said.
However, Mr Crosby added that even if the proportion of fee-charging ATMs exceeds 50 per cent, these machines are unlikely to account for more than 5 per cent of all cash machine transactions. Such machines represent only 3.6 per cent of all transactions. He said HBOS remained committed to providing free-to-use cash machines, despite its sale of 814 terminals to Cardpoint, a private operator, last year.
However, MPs criticised Mr Crosby for the sale of the 814 machines, highlighting that 250 had already been transformed into fee-charging terminals, with many of the rest likely to follow suit. They said HBOS had cashed in doubly, by lending the money to Cardpoint for the deal.
Mark Mills, Cardpoint's chief executive, who faced the committee along with managing directors of three other private ATM operators, admitted he hoped to convert more of the HBOS machines to a fee-based structure, saying "that was the point of the deal".
In response to MPs' criticism that customers did not want to pay for cash withdrawals, Mr Mills said: "Every customer would like everything for free, but the world isn't like that. But when our service is charged for, people are quite happy to pay a fee rather than not having the service at all."
Although the private operators rejected calls for a cap on ATM charges, Mr Crosby said he was not opposed to a cap "in principle". However, he said it would probably not be legal.
Benny Higgins, the head of retail banking for Royal Bank of Scotland, said he did not think a cap was necessary, while all four private operators said none of their machines charged more than pounds 2 for a withdrawal.
John McFall, the chairman of the Treasury Select Committee, called on the industry to use clearer warnings on machines that charge. He said he would look into what customers at RBS - which owns a fee-charging ATM operator called Hanco - wanted, to which Mr McFall retorted: "I'm a long standing RBS customer, and I'm telling you I want you to put bigger warnings on your machines that charge."
Mr McFall added he was concerned that customers in deprived areas were the worst affected by the dilution of free ATMs, with many having no free cash machines within miles. Mr Higgins said RBS had more machines in deprived areas than inn wealthier districts.
The private operators continued to resist calls for the mandatory introduction of large price warnings on the outside of charging machines, warning this would make it harder to change prices quickly. They added that charges are not the same for every customer.
The inquiry ends next week when Nationwide, the Post Office and Stephen Timms, the Financial Secretary to the Treasury, are questioned.
There is suspicion that traditional banks are happy for ATM charging to come in gradually so that ultimately they will be able to charge. But Mr Crosby said he was committed to free ATMs.Reuse content