Queenstown Lakes District Council Arrowtown councillor Scott Stevens was "disappointed" with the decision.
"There’s going to be times of the year, particularly during events such as Autumn Festival, when the queues at an ATM are just going to be ridiculously long and the machine won’t be able to cope."
Autumn Festival co-ordinator Carole Watts hopes festival-goers will not turn up reliant on the remaining BNZ cash machine.
In the past, both machines on Buckingham St had been "hammered" during the festival and either ran out of money or had gone "out of service" due to the influx of customers.
In an emailed statement, Westpac external relations senior manager Heather Shiels said low use and the machine’s age were the reasons it was removed last week.
"We are aware that more people and businesses are choosing to use mobile and online banking and cards to make payments."
She said Arrowtown still had an ATM machine available and people travelling from out of town could draw cash from another machine before arriving.
