# What are banks' profit margin on ATM transactions.
**URL:** https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478
**Category:** Factual Questions
**Created:** [August 3, 2005, 9:19pm UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478 "2005-08-03T21:19:47Z")
**Posts on this page:** 7
**Page:** 1
### Author:  [@zamboniracer](https://boards.straightdope.com/u/zamboniracer)
#### Post date: [August 3, 2005, 9:19pm UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478/1 "2005-08-03T21:19:47Z")
I’ve been wondering if anyone knows precisely how much banks make on ATM transaction fees. They charge anywhere from a $1 to $2.50 for transactions that I’m guessing only cost them pennies, but I don’t know for sure. Does anyone know the answer?
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### Author:  [@muttrox](https://boards.straightdope.com/u/muttrox)
#### Post date: [August 3, 2005, 9:22pm UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478/2 "2005-08-03T21:22:46Z")
Most banks for most accounts charge absolutely nothing.
I believe their profit margin on ATMs is not from direct fees, but from the savings they get by not having to have employees physically be present and work with you.
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### Author:  [@jsmith](https://boards.straightdope.com/u/jsmith)
#### Post date: [August 3, 2005, 10:28pm UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478/3 "2005-08-03T22:28:18Z")
I have a bank that I don’t use often because they aren’t local but they reimburse me up to $2.00 for the atm fee up to 10 times a month. If I didn’t have to mail my checks in and had direct deposit that would be a good deal. I wonder how they can afford to do that.
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### Author:  [@Emerald\_Hawk](https://boards.straightdope.com/u/Emerald_Hawk)
#### Post date: [August 3, 2005, 11:20pm UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478/4 "2005-08-03T23:20:12Z")
I used to work for a banking consulting firm, and the amount varies based on location. I think [this](http://banking.senate.gov/97_06hrg/061197/witness/helwig.htm) answers the question better than I could and provides some starting numbers:
> [@](#):
>
> - What Are the Costs of Operating ATMs?
>
> The costs include buying or leasing the machines, maintaining them, renting space for off-premise machines, operating them including the cost of cash, telephone lines, modems, encryptors, computers, audit tapes and receipts, the cost of physical security including lighting, cameras, kiosks and in some cases phones or panic buttons, the costs of signage and advertising, monthly network costs (large ATM operators typically belong to many networks), costs of settlement, legal and regulatory costs, costs of resolving consumer problems and dealing with fraud) and finally the costs of upgrading ATMs to respond to consumer demand for more services and enhanced graphics.
>
> The Consumers Bankers Association has compiled figures indicating that a new ATM costs between $7,000 and $50,000 depending on features, and monthly operating costs range from $1,000 to $1,500. ATMs located in a bank average about 6,000 transactions a month. Off-site ATMs average only about 3,000 transactions a month and many of them do far less. Based on average interchange, revenue per average ATM would be between $1,100 and $2,300 per month.
Therefore, it could cost anywhere from 17 to 50 cents per transaction.
I know the guy in the link is the Executive Director of the Electronic Funds Transfer Association, but I couldn’t find anyone disputing the numbers from the Consumers Bankers Association study that he cites. Personally, fifty cents is actually higher than any numbers I saw from banks, but I only consulted for small banks with on-premesis ATMs.
Obviously this isn’t the whole story, the link also talks about the interchange fee but doesn’t go into great detail about the back end network. And like **muttrox** said, bank tellers themselves are much more expensive. (1 to 3 dollars according to some of the banks we consulted for).
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### Author:  [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)
#### Post date: [August 4, 2005, 1:48am UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478/5 "2005-08-04T01:48:29Z")
The sales literature for at least one ATM I’ve looked at used $1/ATM transaction as a basis point for their comparison with the cost of teller withdrawals, which the ATM vendor asserted cost an average of $2.50.
Of course if you add in EVERY COST of maintaining the bank branch teller operation versus EVERY COST of maintaining an ATM, you could come up with a million different answers based on off-premises, on-premises, crime, overhead, rent, etc.
I suggest listening to Emerald Hawk’s numbers, though, as I tend not to trust sales literature further than I can throw the fat, lying bastards who hand it to me.
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### Author:  [@abby](https://boards.straightdope.com/u/abby)
#### Post date: [August 4, 2005, 4:47am UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478/6 "2005-08-04T04:47:53Z")
> [@jsmith](#):
>
> I have a bank that I don’t use often because they aren’t local but they reimburse me up to $2.00 for the atm fee up to 10 times a month. If I didn’t have to mail my checks in and had direct deposit that would be a good deal. I wonder how they can afford to do that.
Well, banks make money from investing your money in things, not from the fees you pay, right?
I heard a stat somewhere that said that banks customers with a balance regularly under something like $800 were making a loss for the bank, assuming they did the regular few complaints a year, 15 ATM and 2 OTC transactions a month (and so on).
a
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### Author:  [@jsmith](https://boards.straightdope.com/u/jsmith)
#### Post date: [August 4, 2005, 3:00pm UTC](https://boards.straightdope.com/t/what-are-banks-profit-margin-on-atm-transactions/315478/7 "2005-08-04T15:00:51Z")
> [@abby](#):
>
> Well, banks make money from investing your money in things, not from the fees you pay, right?
If the bank does business the old-fashion way (which is nice!). It seems the new trend from many banks to profit from fees nowadays.