Independent ATMs fees constant shifting

Friday November 27, 2009

Banks ATMs have often dominated the question of ATM fees and their current rates with industry reports claiming the significant amount of profit they make for the major banks. After the March 3rd increase resulted in banks ATM fees rose to an average of $2 per transaction made on a competitors ATM. However, it is now the independently owned ATMs that are reacting to consumer usage trends, with their fees climbing in remote locations where competition is low for any other ATMs.

According to Customers Limited, currently the largest owner of ATMs in Australia, remote location ATMs that are independently-owned have begun rising their attached transaction fees from the market average of $2 to $2.50. This increase has affected approximately 220 locations with plans for the increase to then be passed onto a further 300 ATMs.

The increase of ATMs fees at 520 locations will account for around 10 per cent of total ATMs under Customers Limited branding, according to Customers Limited managing director, Tim Wildash.

Defending the increase in ATMs fees for remote locations, Mr Wildash stated that remote ATMs were more expensive to operate due to the distance from operating centres and repairers.

It should be noted however, that to counteract these ATMs fee increase at low traffic areas, fees have been cut at select high traffic locations in the city where there is significant competition from banks-owned ATMs located nearby.

Of course this increase in fees for independently owned ATMs can have an effect on consumer usage trends with customers initially shunning the use of competitors ATMs when the new regulations and fees were introduced in March 2009.

In fact, in March an analysis of customer usage trends showed that after the introduction of higher fees customers "own banks" ATMs use rose by almost 6 percent with 60.0 percent of people using their own in March 2009, whereas this figures dropped back to 58.6 percent in April.

Before the ATM fees hike, Australian ATM users would actually use foreign or independent ATMs for almost half of all ATM transactions. In fact, 47 percent of all 867 million transactions in 2008 were foreign ATM sessions according to a previous report by MWE Consulting. This trend was attributed to the sheer convenience of the location of ATMs, with customers choosing to opt for the closest ATM as opposed to their own banks.

While fees have always been incurred when using a foreign ATM, it was the direct charging of $2 that dented this behaviour in March, and somewhat interrupted what has always been a strong revenue stream.

As of the end of 2008 there were 27,081 ATMs in Australia, an increase from 21,266 in 2003 with figures showing that on average people withdraw less money from a foreign ATM, typically a difference of $50.

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