ATM fees: Banks and independent providers gouging Aussies for over half a billion dollars a year

BANKS and independent ATM providers are gouging over half a billion dollars in unnecessary ATM fees from Australians each year.

RateCity’s survey found that one in three Australians still paid ATM fees, with women and young adults more willing to fork out the extra cash for convenience.

BANKS and independent ATM providers are gouging over half a billion dollars in unnecessary ATM fees from Australians each year.

Instead of withdrawing money for free at their own bank ATMs, about 40 per cent of people are using “foreign” machines belonging to a third-party provider for the sake of convenience.

These third-party machines routinely charge between $2 and $3 per transaction.

This price of convenience has cost Australians an estimated $548 million in avoidable ATM fees in the past year, the financial comparison site RateCity.com.au said after analysing date from the ­Reserve Bank of Australia.

“Half a billion dollars a year is an excessive amount of money to be spending on accessing our own money,” RateCity money editor Sally Tindall said.

RateCity’s survey found that one in three Australians still paid ATM fees, with women and young adults more willing to fork out the extra cash for convenience.

“Nearly 40 per cent of women pay ATM fees, compared with just 27 per cent of men,” Ms Tindall said.

Younger Australians also seem to be less concerned with finding their own ATMs, with 40 per cent admitting to using the wrong ATM, compared to 27 per cent of Baby Boomers.

“If half of these transactions were made either at a free ATM or at a retailer that provides cash out, collectively we’d save around $274 million per year,” Ms Tindall said.

An RBA report released last week found that direct ATM charges have, on average, risen slightly in real terms since the 2009 industry reforms, which mandated that ATM providers must disclose their prices to their customers.

third-party machines routinely charge between $2 and $3 per transaction / Supplied

But the amount spent on ATM fees has fallen, reflecting declines in the number of withdrawals and the proportion of withdrawals on which a direct charge is paid.

In recent years the demand for ATM services has fallen due to the shift among consumers to electronic payment methods such as paypass and tap and go.

The number of withdrawals on which a direct charge is paid has fallen by about 20 per cent since 2010, the RBA says, ­implying a $60 million reduction in fees paid.

Last year about 55 per cent of ATMs in Australia were independently owned, up from 47 per cent at the start of 2010.

The two largest ATM networks in Australia are now DC Payments and Cashcard, with 7251 and 4691 ATMs respectively, compared with Commonwealth Bank’s 3822.

Originally published as ATM fees: Banks and independent providers gouging Aussies for over half a billion dollars a year