Big banks follow CBA in ditching ATM fees for customers of other banks

The big banks have axed ATM fees for customers of other lenders, as the Treasurer warned off any attempts to recoup fees.

Customers use a Commonwealth Bank ATM in Brisbane. (AAP Image/Dan Peled)

Treasurer Scott Morrison has declared the federal government will monitor the top four Australian banks to ensure the ‘foreign’ ATM fees scrapped are not recouped through higher charges elsewhere.

CBA announced earlier today that it will remove the fee charged by non-customers to use its ATMs and was followed in quick succesion by Westpac, ANZ and the NAB.

Mr Morrison said it was vital that the banks do not reap the lost income by jacking up fees in other areas of banking.

The Australian understands the top four banks earn about $100 million a year from the fees.

“Australians are sick and tired of these types of fees,” Mr Morrison said.

“We will be watching the banks carefully to ensure they don’t pass on these costs to consumers in other ways.

“It is important that we have more players in the banking sector so customers can get a better deal.”

NAB (NAB) Consumer Banking head Andrew Hagger, said the decision to scrap the fee was made because it would benefit its customers.

“This is a good outcome for customers. We know it has been frustrating for them to be charged to withdraw their own money from an ATM, and the change we are announcing today will benefit millions of Australians,” Mr Haggar said.

Westpac (WBC) and its associated St George and Bank of Melbourne ATMs charged customers $2 each time withdrawals were made but that will now be scrapped.

CBA (CBA) was the first bank to announce it would dump its $2 fee for its non-customers and that decision was quickly replicated by the other major banks.

Westpac’s Consumer group executive George Frazis said the bank realised the “foreign fees” were unpopular and the move would benefit regional customers.

“This will make it more convenient for millions of Australians to conveniently obtain cash, with no additional fees. It will particularly assist Australians in rural and regional areas,” he said.

“We understand that the ‘foreign ATM’ fee has been deeply unpopular with consumers. Along with our new low interest credit card as well as removing teller sales incentives, Westpac is listening and responding to consumer concerns,”

A recent survey by finder.com.au, the online comparison site, found that Australians were spending about $780 million a year in fees by accessing ATMs not owned by their own bank.

Reserve Bank of Australia data shows Australians made more than 250 million ATM withdrawals from banks other than their own last year.