ATM Industry Association (ATMIA) issued a response to misleading statements about ATM fees contained in a rash of recent US news articles. Political reactions to those articles, branding the fees “exploitative” and “usurious”, were offered with little or no effort to determine the true facts.
A survey of bank ATM fees published several weeks ago, correctly notes that the national
average bank surcharge (convenience fee) is about $2.88. It also notes that “…your own bank likely will charge you a fee that averages $1.64 for using an out-of-network ATM” – resulting in a total fee of $4.52. Virtually all of the news coverage which followed ignored the details and simply inferred that $4.52 was the average surcharge imposed by ATM operators.
Both bank and independent ATM operators sometimes levy a convenience fee, in order to recover the costs of the ATM itself, transaction fees, maintenance, regulatory compliance, replenishing the ATM with cash, etc. An out-of-network or “foreign bank” fee has nothing to do with the ATM operator. It is a fee imposed by the ATM user’s bank; typically serving as a means of discouraging the use of out-of-network ATMs.
According to research commissioned by ATMIA earlier this year, pre-tax profit margins for independent ATM operators (IADs) are in the range of only 6 – 7%. By any measure, this margin is a long way from being exploitative or unfair. In fact, convenience fees for ATMs operated by IADs, on average, are already less than for those operated by banks. ATMs are placed into convenient locations away from the branch at a high cost and the current business model has enabled hundreds of thousands of these deployments to be viable in the long-run.
ATMIA encourages legislators and regulators to bear these facts in mind when evaluating the state of the industry. It is critically important to understand the differences between fees imposed by the consumer’s bank and those needed by the ATM operator to continue providing convenient access to cash.
“The current public perception about ATM fees is off the mark. Politicians should acquaint themselves with the real facts of our industry before making off-the-cuff and inaccurate remarks which are easily taken out of context. There are also a host of surcharge-free ATMs to choose from across the country as well,” commented Mike Lee, CEO.
The ATMIA Position Paper on surcharging can be downloaded from the ATMIA website.
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