Falkland Islanders face being marooned without access to cash when its only ATM is disconnected in the coming weeks.

The free cash machine was installed in the capital Stanley last year to serve the community, plus the tens of thousands of tourists who visit annually. Its disconnection would leave Falklands residents with just one bank branch to serve its 3,400 inhabitants.

Businesses in the Falklands have traditionally relied on cash, making this ATM shutdown particularly punitive. Banking regulations have made it difficult for small firms to accept cards, according to Mastercard, which operates in the overseas territory. Credit and debit cards are not widely accepted outside Stanley. 

The islands have their own currency, the Falkland Islands pound, which is fixed at a rate of one pound Sterling, but UK notes and coins are also accepted. The solitary bank on the islands, Standard Chartered, offers a cashback service.

Falklanders have been trapped in a dispute between two firms. The ATM, which processes around 1,000 transactions a month, half of which come from tourists, was installed by operator Note Machine.

Link, which connects cash points to banks and building societies, said it was “surprised” that an ATM in the Falklands was connected to its network, and that it falls outside of Britain’s home territories, where it exclusively operates. 

The company has imposed additional costs on Note Machine after this realisation, which said it would have to disconnect the machine “in the coming weeks” as a result. While it could moved to another network, these extra fees have rendered the ATM uneconomical and so is being shut down.

A spokesman for Link said: “Link only operates ATMs on the UK mainland and Channel Islands. 

“We were surprised to find that a machine in the Falkland Islands had been connected to Link last year and have asked the operator to move it to one of the international ATM networks that are normally used for such sites. 

“We understand that this move is underway and have no plans to disconnect the machine from Link until that’s done.”

The move follows a similar collapse in ATMs in mainland Britain, where the number of free cash points has fallen by a quarter since January 2018, with fewer than 50,000 remaining.

Earlier this year Telegraph Money launched its “Keep Cash” campaign, which secured commitments from more than 20 major retailers to continue accepting cash in their outlets indefinitely. The campaign won the support of more than 50 MPs from across the political spectrum.

There has been a sharp decline in cash usage in mainland Britain, where bank branches have closed at record rates over the past year. The British public now withdraws £100m less from cash machines each day, compared to pre-pandemic levels, after many retailers banned customers from paying in notes and coins.

Consumers now visit cash machines less than twice a month on average, down from three times a month before the pandemic hit, according to Link.