I’ve recently seen advertisements from my bank boasting their new policy of not charging fees to accountholders of other banks when using their ATMs. That’s perfectly nice and all, but they still charge their own customers for using other banks’ ATMs. Why in god’s name would they not do it the other way around? It seems like they’d attract more customers if they advertised that they would never charge their own customers ATM fees. As it is, they seem to effectively saying that you’ll be less screwed if you stay with your present bank; not a good marketing move IMO.
Is there any reason why they’d want more people using their ATMs when they’re not charging fees for it? Is there some obscure aspect of ATM economics that I’m overlooking which makes this practice sensible?
If a bank DOES NOT charge non-customers, perhaps it’s because they can show that there is money owed to them gaining interest (not to mention the fees that non-customer will incour using the “out of network” ATM) or an asset. Why they’re charging you, the customer, for using their ATM is a mystery to me.
I did however encounter something similarly strange the other day at the grocery store:
At the check-out, I was running my “check card” through the payment terminal and it asked “Debit or Credit”…as usual I pushed “Debit” and continued the transaction.
The cashier told me that the bank charges me $1.50 for each “debit” transaction, but there’s no fee for a “Credit” transaction. I thought this strange since when you hit “debit” or “credit” the money is pulled out of your account automatically right on the spot…there isn’t a chance for the bank to gain interest on a “credit” purchase if the money is coming out right away.
So I guess the point is: sorry, other than the interest arguement on the non-customer side, I don’t know why our banks are charging us for a convienence that’s only saving them money (teller salary, operating costs, etc).
OK, banks charge non-customers fees for using their ATMs for two reasons:
To convince you to switch to their bank
Because they can, and you have nowhere else to go.
Most banks do not charge their own customers for ATM transaction on THAT bank’s ATM. For example, Citibank does not charge me any time I use a Citibank ATM.
But if I march my citibank card into a non-citibank ATM, say, a Chase one, then Chase charges me $1.50 for the courtesy of accepting my evil, alien card. There is also a cost in doing the transaction from Citibank to Chase; obviously they’re making enourmous profits there.
My bank only charges $0.25 for debit transactions. And another bank I used to bank with didn’t charge anything. But, they charged $9/month service, whereas my new bank only charges $5.
Credit transactions don’t cost me a thing, but I can’t ask for cash back from my purchase.
You do have somewhere else to go. My wife and I cash our spending money by check at the bank once per pay period, and we do just fine.
In exchange for providing you an incredible conveniece throught ATM’s, they make a profit off of your use of them. That’s capitalism. If people don’t like ATM charges, they can switch banks or not use ATM machines. That’s capitalism also.
I think ATM machines are awesome, even with a $1.50 charge. If for some reason I get stuck in DC or L.A. or Dallas, I can easily get cash for a small fee and be on my way.
No, when I use other banks’ ATMs I get charged twice: once by the bank operating the ATM (this is the fee that my bank does not charge others) and once by my bank for not using one of their ATMs (the total fee is typicaly ~$3). I think it would make more sense for my bank to not charge the second type of fee instead of the first.
As someone pointed out above, sometimes, if you use a bank’s ATM you get charged twice - once by the bank to whom the ATM belongs, and once by your own bank. I realize that you’re paying for convenience, but it does seem like a pretty large fee.
I got an offer in the mail the other day from a bank that not only won’t charge you for using other banks’ ATMs, but will reimburse you for charges levied by other banks up to $8/month or so. Seems like a pretty good deal, although I think that another solution is to use a bank that is convenient to where you live/work.
As suggested above, ATM fees are something that really test one’s faith in capitalism. On the one hand, nobody’s being forced to pay them. On the other hand, they really are quite high. I would imagine that the cost to the bank for processing a non-bank ATM withdrawal, including the capital cost of the ATM machine, is a lot less than $1.50 or whatever. (anyone care to correct me?)
It strikes me as odd that in a free market somebody could charge so much for something that costs them so little for long. If ATM’s generate obscene profits, why don’t more people set them up, compete, and drive down fees?
By “obscene profit” I think the others mean that it costs the bank, say $0.15 per transaction, but the bank charges $1.50. This, of course, is not pure profit since the bank has to pay for the ATM and service it.
If you put up your own ATMs, you will want an armored car to carry the money in. Or pay someone else to do it.
I have seen “private” ATMs. Some bars use ATM ticket machines. These are easy to service since there is no money in them. You take the ticket to the cashier to get your money.
One place I go to put in a private ATM that does dispense cash. They charge $3 per transaction. They stopped taking credit cards so they save those charges also.
I worked in the IT department of a financial institution and the ATM network was a big pain in the butt so I don’t care if banks charge non customers. There is work involved. This is the equivalent of going into Burger King and wanting McDonald’s fries. Those machines cost about $70,000.
So in sum, if you don’t like the fees, then don’t use the ATM. Use one that belongs to your own bank. Why should Bank A be responsible for giving you money when you don’t bank there?
And I congratulate all of you for not saying ATM Machine.
I’m not sure if any of the above actually answered your question as I read it, so I hope this helps.
When a non-account holder uses an ATM there are two fees involved (1) a fee directly to the ATM card holder (your bank has graciously waived this one to non-account holders); and (2) a fee to the bank where the non-account holder does have their account (the fee you are still being charged).
The logic behind your bank’s decision is that while their willing to forego the additional charge directly to the non-account holder (they still get $$ from the non-account holder’s bank, and they get good publicity), they are not willing to shell out money from their own pocket to cover the fees the other banks will charge them when you use a competing bank’s ATM.
My wife and I use our ATM cards when making ordinary purchases at locations that accept debit cards, and ask for cash back, usually 20-60 bucks (a typical trip to the ATM machine).
This way, it’s recorded by the bank as a debit, not an ATM withdrawal, so we get no fees from either direction.
The bastards.
We only use cash at places that require it, like Burger King.
Eventually, with direct deposit, VISA check cards and debit cards, we won’t need to touch cash at all. It’s a major disease carrier. Yuck.