ATM usage fees: Wikis

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From Wikipedia, the free encyclopedia

ATM usage fees are the fees many banks and interbank networks charge for the use of their Automated Teller Machines (ATMs). In some cases, these fees are assessed solely for non-members of the bank; in other cases, they apply to all users. Many people oppose these fees because ATMs are actually less costly for banks than withdrawals from human tellers.

Two types of consumer charges exist: the surcharge and the foreign fee. The surcharge fee may be imposed by the ATM owner (the deployer or Independent sales organization) and will be charged to the consumer using the machine. The foreign fee or transaction fee is a fee charged by the card issuer (financial institution, stored value provider) to the consumer for conducting a transaction outside of their network of machines in the case of a financial institution.

Contents

Australia

On 3 March 2009 Direct Charging (surcharging) on Australia’s ATM networks was introduced. The Reserve Bank of Australia says this reform will result in benefits to competition and efficiency in the Australian ATM system. [1].

Most banks, (Commonwealth Bank(CBA), ANZ and Westpac/St.George) levy a $2 "ATM service fee" for withdrawals and balance inquiries at their ATMs by non-customers, NAB charges $1.50 (50c for an enquiry), Suncorp $2.20 (80c for an enquiry).

Suncorp and BankWest sponsored independent deployers are charging fees from $2, at these early stages $2.20 and $2.50 are not uncommon in pubs and clubs.

Bendigo Bank charges its customers $1.00 to use another bank's ATM. ANZ, Bank of Queensland, BankWest [2], CBA, Suncorp and Westpac/St.George do not charge any fee to use another bank's ATM.

Iran

There is one ATM network in Iran, SHETAB. There were no charges in this network until fees were introduced in 2008. Transferring money between two accounts costs 5000 IR per transaction, and getting balance has a 1000 rial charge for other bank cards. Currently other services are charge-free.

Bangladesh

There are multiple ATM networks in Bangladesh. The market leader, Dutch-Bangla Bank has the largest ATM network and it is also the network with the most member banks. Dutch-Bangla Bank customers are not charged for ATM transactions.

Dutch-Bangla Bank has separate agreements with local and international banks where Dutch-Bangla Bank charges BDT 10 (USD $ 0.14) per transaction to member banks. Due to this low amount, member banks often add an extra amount as a profit margin.

Canada

A short description of the fee structure one experiences while using Canadian ATMs can be found at the Interac website.[3]

Before the presence of White Label ATMs, most Canadian customers were only charged the standard Interac Network Transaction Fee when a customer was using an ATM not provided by the bank that held their account (historically $0.75 CAD, now $1.50 CAD). As the Interac network was opened up to more Independent sales organizations ("ISO")s and the potential for additional revenue from Service Fees were made available, most banks elected to impose the Service Fee in addition to the revenue that was generated from the Interac fee.[4]

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Neutral Consumer Information

The Government of Canada maintains a chart of the fees typically charged for use of ATMs in Canada.[5] The chart is part of the Financial Consumer Agency of Canada's Cost of Banking Guide.[6]

European Union

Rules are being introduced that will force banks to levy equal fees for customers of all banks in the European Union. This may mean national fees become higher. See Single Euro Payments Area.

These rules apply since 2002-07-01.[7] Eurozone and Swedish[8] customers are exempt from getting lower international fees outside Eurozone countries, because only fees for euro withdrawals are regulated. Non-Eurozone customers (except Swedish customers) are completely exempt from getting lower international fees, because the regulation only states that international euro withdrawals should be available at the same price as national euro withdrawals (and euro withdrawals are very uncommon in non-Eurozone customers' home countries).

Austria

Cash withdrawals are free for any owner of an Austrian Maestro card.

Finland

Cash withdrawals are free for any owner of an Finnish bank card or Visa Electron cards on ATM brand "Otto." which is the largest ATM network in Finland. There are smaller rivals which have fees. "Otto." ATMs accept also Visa, MasterCard, American Express and Diners Club credit cards. They also belong to Maestro, Cirrus and PLUS networks.[9] Fees depend on card issuer.

Germany

German banks charge fees for withdrawals at another bank's ATM. Usual fees are 4-5 EUR. Most banks are part of interbank networks like Cash Group that unites five major German banks or Cash Pool. Within one of these networks, customers can withdraw free of charge. Cash Group provides around 7,000 ATMs, Cash Pool around 2,500. These networks have affiliates mostly in the cities but are rarely found in rural areas. The credit unions ("Volksbanken" and "Raiffeisenbanken") provide around 18,000 ATMs, very often in smaller towns and villages, but less frequently available in the big cities. The most extensive network of bank affiliates and of ATMs belongs to the savings and loans associations ("Sparkassen") with 24,600 ATMS in Germany.

Ireland

The Financial Regulator forbids all ATM usage fees in Ireland.

Netherlands

ATM withdrawals in the Netherlands are free. But you can only draw cash at another bank's ATM once a day, and there is a lower limit.

Portugal

All Multibanco withdrwals and payments in Portugal are free. Recent European Union directives allowed merchants and banks charge the costumers for transactions, but the governement aproved a law that forbids charging any kind of fees. Left Block and Portuguese Communist Party were the political parties that came up with the proposal and the ones more devoted with this idea.

Spain

Banks that are not associated with the user's bank will usually charge a fee of €0.50 per withdrawal of cash from the machine. Other services such as top-up of mobile phones are usually free.

Sweden

In Sweden, most banks issue debit cards for an annual or monthly fee which includes free withdrawals in Sweden and within the eurozone. However, customers are typically subject to a fee if using a cash machine elsewhere. Some cards from some banks are, however, subject to fees also when used in the eurozone and some Swedish cash machines. Most of these cards are issued by savings banks.

United Kingdom

Public reaction to proposed increases in fees was so strong in 1999 after a campaign launched by Nationwide Building Society and the UK tabloid newspapers that fees were removed altogether for using ATMs at banks, regardless of whether the user is a customer of that bank.[10] However, each time a bank's customer uses a rival bank's ATM, the customer's bank has to pay a fee to the rival bank, which the customer's bank absorbs.[11]

There are a growing number of machines in locations such as garages, nightclubs and other venues which do charge transaction fees. The fee charged in 2005 was usually between £1.00 and £1.50,[12] but occasionally they have been known to charge up to £5[13] and £10.[14]. Many other machines do not charge at all (e.g. cash machines owned & Operated By Abbey National). There has been some debate in recent years about the location of machines which charge in deprived areas, where the larger banks which would have provided free ATMs have closed branches.[15] Rules surrounding the requirement of ATMs to display any fees incurred by the consumer were clarified in 2005.[16][17]

Hong Kong

There are three ATM networks in Hong Kong: ETC (HSBC and Hang Seng Bank only) JETCO (all remaining banks) and AEON. ATM use is free of charge, except when a card is used outside of its respective home network. When a card is used outside the home network, HKD$30 is paid for service charge.

Switzerland

The usual fee for a withdrawal at a "foreign" bank's ATM is CHF 2. All Swiss banks hand out Maestro cards to their customers, so that any ATM can be used.

United States

Prior to 1988, there was no surcharging of cardholders by ATM owners in the U.S. In 1988 Valley Bank of Nevada began surcharging "foreign cardholders" (meaning holders of ATM cards not issued by Valley Bank) for withdrawals at Valley Bank ATMs located in/near Las Vegas casinos. [18] Eventually, various regional ATM Networks, and ultimately the national networks, Plus and Cirrus, permitted ATM surcharging.

Before 1996, foreign ATM fees averaged $1.01 USD nationally, according to a 2001 report from the US-based State Public Interest Research Group.[19]

As banks and third parties realized the profit potential they raised the fees. ATM fees now commonly reach $2.00 (2003[20]), and can be as high as $6.00,[21] or even higher in cash-intensive places like bars and casinos. In cases where fees are paid both to the bank (for using a "foreign" ATM) and the ATM owner (the so-called "surcharge") total withdrawal fees could potentially reach $11. Independent sales organizations ("ISO"s) are the driving force in ATM deployment in the U.S. today representing over 60% of the 396,000 ATMs nationwide. Some have expressed concerns that the U.S. market is becoming too saturated, spreading the resulting fee pool too thin, which may result in a future net decrease in the number of machines.[22] Other media reports indicate that growth in ATM usage has decreased, possibly in relation to the amount of fees imposed by banks.[23]

Only some fees charged by ATMs are advertised at the point of transaction. This is more of a cautionary statement, as ATMs are required by law to inform users of the surcharge fees that the machine will charge the user. This information may come in the push through menu or it may be on a sticker on the machine. However, the ATM card holder's own bank may charge a "foreign ATM network" fee to the card holder for using an ATM that is not owned and operated by the card holder's own bank. Since this charge is not assessed by the machine or the owner of the machine, it is usually not advertised at the time and place of the transaction. Thus, it becomes the responsibility of the card holder to be aware of the details of their own bank's fee structure, which may also vary from state to state, to determine the total cost of an ATM transaction. In addition, the "foreign ATM network" fee may be different if using an ATM outside the U.S. versus inside the U.S.

A new charge that has come into the marketplace is the "Denial Fee", where a customer is charged a fee for attempting to withdraw more money than they are either allowed through their daily withdrawal limit or by having insufficient funds in their account.[24]

While many consumers are faced with multiple fees as described above, a number of standalone and internet banks, such as USAA and E-Trade Bank, not only do not charge their customers for using another ATM but they also provide reimbursement, worldwide, of another ATM's fee. Thus, customers at some banks in the US can avoid ATM fees altogether. Another popular way to avoid paying ATM fees is to make a cashback purchase at a retail store: many retailers will allow a customer who is paying with a debit card to withdraw more than the total due the retailer and get back the difference in cash.

South Asia

Sri Lanka

In Sri Lanka banks usually charge a fee of LKR (Sri Lankan Rupees) 50.00 (USD 0.40 to 0.60) per non user's bank withdrawal of cash from the machine.

Pakistan

In Pakistan banks usually charge a fee of PKR 10 to PKR 35 (USD 0.15 to USD 0.40) per non user's ATM cash withdrawal. These fees are levied chiefly to offset banks' own costs at par only. There are two ATM switches operational in the country, 1LINK, hosted by a consortium of banks, and MNET, hosted by MCB Bank Ltd; and all Pakistani banks are members of one or the other switch as per the mandate of the State Bank of Pakistan, the country's central bank. Some banks, like Allied Bank and HSBC, absorb the costs entirely, and offer their customers totally free withdrawals at all ATMs countrywide, including Azad Jammu and Kashmir; a territory between Pakistan and India whose status is disputed.

India

Recently, the Reserve Bank of India (RBI), the country's central bank, has issued a directive to all commercial banks to abolish ATM service charges inter alia. With effect from 01 April 2009, customers of any licenced commercial bank can use the ATMs of other banks without paying a reciprocal service charge. Earlier, banks used to charge between INR 10 and INR 35 per reciprocal transaction.[25]

However, banks can still charge extra for services such as credit card ATM cash advances and at foreign ATMs. In addition, RBI imposes significant foreign exchange restrictions on the use of Indian debit VISA/MasterCard abroad. For example, Indian debit VISA cards are routinely marked "Valid in India and Nepal only" due to the country's foreign exchange reserve policy.

Again, recently the same directive was reverted to the earlier one which allowed banks to charge nominal fees for allowing customer's of other banks to use their ATMs.

See also

References

  1. ^ RBA: ATM FEE REFORMS
  2. ^ No charge for Bankwest customers when they use Foreign ATMs
  3. ^ http://www.interac.org/en_n2_22_fees.html
  4. ^ CBC Marketplace: ATM Fees
  5. ^ FCAC - For Consumers - Banking and Insurance - ABM fees
  6. ^ FCAC - For Consumers - Interactive Tools - Cost of Banking Guide
  7. ^ http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001R2560:EN:HTML
  8. ^ http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52002XC0711(03):EN:NOT
  9. ^ http://www.otto.fi/index.php?ca=in_english&an=default
  10. ^ Barclays agrees to delay imposition of ATM fee - September 23, 1999
  11. ^ LINK | The World's Busiest ATM Network | Transaction Management Services
  12. ^ ATM users to pay £250M in fees next year
  13. ^ http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtreasy/191/191.pdf
  14. ^ Banking and credit | Cash machines
  15. ^ ATMs charging the poor | The Sun |HomePage|News|Sun Money
  16. ^ BBC NEWS | Business | New rules make ATM fees clearer
  17. ^ LINK | The World's Busiest ATM Network | Transaction Management Services
  18. ^ United States Court of Appeals for the Ninth Circuit Valley Bank v. Plus Sys., Inc.:
  19. ^ Edmund Mierzwinski (2001-03-29) (PDF). Double ATM Fees, Triple Trouble. U.S. Public Interest Research Group. http://www.stopatmfees.com/report01/report01.pdf. Retrieved 2007-06-26.  
  20. ^ Press Releases
  21. ^ Latest game of chance in town: ATMs
  22. ^ Are there too many ATM machines? - Money - MSNBC.com
  23. ^ After 25 years, ATMs facing market changes - Business First of Buffalo:
  24. ^ In denial: ATM fee for getting nothing - The Red Tape Chronicles - MSNBC.com
  25. ^ http://www.telegraphindia.com/1090330/jsp/business/story_10744673.jsp

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