The rise of 'convenience' cash machines could lead to the demise of cashback facilities as banks find they can once again charge customers for withdrawals.

In some locations convenience cash machines (those not owned by banks themselves) are in direct competition with cashback facilities provided at the point of purchase. It's an uneven fight as shop owners make money from customers using the cash dispensers, but not from providing cashback.

Owners of stores where convenience machines are placed get up to 85p for every withdrawal made on them, making it unlikely that cashback, for which owners get nothing, will survive for long.

Two years ago, there was public furore over cash machine (ATM) charges. Instead, high street banks are now charging for using convenience machines. Fees can be as high as £2.50.

One of the latest firms to get into setting up a convenience network is Moneybox. Moneybox charges between £1 and £1.50 per cash transaction (not the most expensive in the country) but the company refused to provide PC Advisor with details of how these charges break down.

Moneybox did tell us that store owners get up to 85p per withdrawal but that how the money is divided is under 'confidential contracts'.

"The remaining money is distributed between banks and facilities owners. Money is distributed to vendors and anyone involved in the ATM transaction," said a Moneybox spokeswoman.

Link, the body that oversees ATM charging, recently asked banks to lower the amount they charge each other for customers to use cash machines. Banks are now worried that normal ATMs will become unprofitable, since they no longer charge consumers directly.

Convenience ATM machines are popping up all over the country — Moneybox says it's installed 1,300 in a year and has plans for a further 3,000 — and are deliberately targeted at remote locations throughout the UK.

Many businesses, such as Sainsbury's and Wetherspoons, give customers the choice of using an ATM machine or their till-point cashback service. But in other places, drawing money from an ATM machine means paying a fee to reach funds without the choice of cashback.

Steve Dennis, director of Luminar, whose group owns Liquid Nightclubs, Jumpin' Jacks and Chicago Rock Cafes said: "Installing the ATMs has lead to improved customer satisfaction. There's nothing worse than being out for the night and running out of money."

But Luminar does not offer a cashback facility when purchasing alcoholic drinks and Dennis said he was not able to comment on whether the rise of ATMs is leading to the demise of cashback.

It seems logical to suggest, though, that if a landlord or store owner has the choice between making money from a customer and providing a useful service for nothing, few will play the good Samaritan.

Mark Hastings, director of communications for the British Beer and Pub Association, defended the machines as extra choice for consumers but admitted the point of installing them is so publicans can make money.

According Moneybox's website, "the closure of rural bank branches also led to new demand for the provision of access to cash in those areas… and the convenience charging model is likely to be adopted by the banks at their retail-located ATMs".

It goes on: "If banks do decide to convenience charge at high street locations it is likely to be limited by the regulator. However, at retail locations, the fee will be set by open market conditions."

Telling words indeed.