More than 250 free-to-use cash machines are being shut down across the UK every month, according to a new report from ATM network operator Link.

The company’s latest ATM Footprint Report found that between January 31 and the start of July this year, the number of free-to-use cash machines fell from 54,500 to 53,200.

Link said the closures were a result of shoppers using less cash, but the Payment Systems Regulator (PSR) has called for the free-to-use cash machine network to be protected.

PSR managing director Hannah Nixon said: “This (report) highlights the challenges of maintaining a sustainable ATM network when the demand for cash is falling. In the short-term, free-to-use ATMs continue to play a vital role in helping people access their money. The requirements we intend to place on Link will help ensure that Link achieves their commitment to protecting the geographic spread of free-to-use ATMs across the UK.

“Link should be in no doubt about the importance of this work. We will continue to work closely with its senior team to ensure these improvements are implemented as soon as possible.Our banks also play an important part in this, as they use the Link network to help people access their cash. We are engaging with the banks to seek their renewed commitment to a widespread geographic network of free-to-use ATMs.We will continue our research to understand how people want to access cash in the future and the role of regulation in helping people do that.”

The release of the report follows Link’s announcement earlier this year that it is cutting interchange fees (the amount paid to operators to run a cash machine). However, the operator has delayed the roll out of some changes over the next few years, in order to protect ATMs in more rural locations.

Link said it had set up “specific arrangements to protect free-to-use ATMs more than 1km away from their next nearest free-to-use ATM”. The organisation added that 2,365 free-to-use cash machines in remote and rural areas will be protected and remain open.

Commenting on the report, Association of Convenience Stores chief executive James Lowman said: “Today’s figures reinforce the need for the PSR to closely monitor the impact that cuts in ATM interchange fees are having on access to the free-to-use ATM network which is essential to local shops, their customers and surrounding businesses, especially in rural areas. It is welcome that the PSR is developing a Specific Direction that will hold link to its commitment to ensure financial inclusion.”