ATM Fee Reform… Continue or Cancel?
Making it big in the news this week is the RBA’s announcement to reform ATM fees for consumers. Sounds exciting right? Not really.
Here is what you need to know. Effective from March 3 2009, any consumer using a foreign ATM will be notified of the fee charged on the screen before they complete their transaction. If they deem the fee too high they can cancel the transaction, and will not be charged.
According to RBA governor Glenn Stevens, the measure is designed to “give cardholders more choice and increase transparency.”
Upon first hearing the words “ATM reform”, I was intrigued. As an irate customer who is constantly slugged with other institution ATM fees, simply because I use the most convenient ATM around at the time and loathe having to walk 5 blocks in search of my banks ATM, I immediately thought, “Finally! A win for customers. No more ATM fees.” Think again.
In the grand scheme of things, will it really make that much of a difference? Probably not. While I agree that it is a step in the right direction and a push by the RBA and the industry to better inform customers, it’s just not enough to get excited about. Customers will still be slugged with the high and unnecessary ‘foreign’ fees, but now they will know about it before they get their bank statement. Is it really going to deter them from using the ATM? Probably not. Will they still be out of pocket? Yes.
So, hypothetically, let’s break it down. With this new change, you can take two paths.
The first is that you are shown the fee on the screen and you decide to continue with the transaction. End result? You are slugged with a fee. Are you really going to stand there and applaud the industry for letting you know in advance how much money will be taken from you? No.
The second is that you decide the fee is too high and go to another ATM, or search in vain for your banks ATM. The end result? You waste 10 minutes of your life searching, and then… get a fee. The outcome is still the same, no matter which way you spin it. So does it really matter how you got there?
But that’s just me. Perhaps I am too cynical. Do you think it will make a difference?
This is all rather confusing. I thought we were already being charged for using competitors ATMs (as well as our ATMs and foreign ATMs). Where do they find the room to charge us another fee, and how do they justify that? Surely it can’t be to encourage us to use our branches ATM, and I’m sure it doesn’t cost a million dollars for a computer to transfer and process another branches data.
P.S. The article wasn’t confusing, the fee structures that the banks use are confusing. The article was very good!
The whole transparency thing is important but I don’t think this really changes anything because most people know they will be slugged by fees at ‘other’ ATMs. It just makes the fees presented on your statement less of a surprise.
Who knows, though, it may cause people to be a bit more careful about how they manage withdrawals.
What is concerning is that the ‘reform’ is actually resulting in foreign ATM fee increases. This is the real story that has been missed.
Previously you were charged a foreign ATM fee by your bank only, which bundled the fee the ATM owner charged / was paid by your card issuer.
The reform allows the ATM owner to charge you directly, which is displayed at the time of the transaction, however it is widely accepted that your bank will also continue to charge you a fee.
Many ATM owners are going to levy a $2 charge, and the major banks all seem to be charging about $0.50 – so a combined fee of $2.50 (of which only the $2 from the ATM owner is disclosed at the time of the transaction).
Unfortunately for nearly all consumers, this will represent a fee increase of $0.50 per transaction as a result of the ‘reform’ as they were previously charged only $2.
Congratulations RBA & ACCC, after 9 years of reform to introduce transparency on foreign ATM fees and a better deal for the consumer, this reform achieves neither. A dismal failure
It does change things, particularly for those who are already disadvantaged. For a start it is now more expensive to use a foreign atm. Also for those such as the elderly, or disabled, and those living in the country, they now get charged more, or have to travel further to avoid the fees. Not to mention the confusing nature of the new fees. Also, the fees effectivly allow atm owners, which does not only mean banks, but also those atms you see in petrol stations, or nightclubs to charge what they like. The atms in places where it is not possible to access a different one can charge you what they like, and if you need money you have to pay. Or you might start the night at th pub sober, get some cash out and get charged $2. later on, when you’ve had a few, the fee can change to $5 – would you notice, or care if youre a bit drunk? A few of these in a month and it starts to take a serious chunck out of you savings. it is easier to avoid thwe fees if you stay informed of who is charging what.