Rage against the bank machine fees

It was always an annoying fee for bank customers — $2 to withdraw money from an ATM if that machine happened to belong to an institution not linked to our bank. Here we were handing over, electronically, a couple of our own hard-earned dollars just for the privilege of being able to get at our own cash. Given the banks were all cross-linked to each other’s machines, this charge always looked like a cash grab for nothing. And the sudden axing of the charge by the banks seems to have confirmed it. The Commonwealth Bank was first to announce the move, soon followed by other majors that between them would lose about $130 million in fees. The decision rightly has been welcomed and the banks are seeking credit for “listening” to customers. But their sudden action seems to suggest there was no legitimate reason for levying the charge in the first place.

ATMs should not be viewed as an additional cost accepted by banks to improve customer services. Rather, they have enabled banks to close branches, reduce staff and cut costs.

The banks have suffered from a range of self-generated scandals in recent years and face customer anger along with ongoing threats from Labor to launch a bank royal commission. The ATM fee move clearly is designed to improve public relations when their customers’ use of cash is constantly declining and we may see fewer ATMs anyway.

As Richard Gluyas has revealed, the major banks had been examining the creation of a utility to manage all of their ATMs, which would make a fee for using each other’s machines even more ridiculous.

Scott Morrison warned that regulators would ensure fee cuts wouldn’t be recouped in other fee hikes. The Treasurer also is expediting measures to improve accountability and impose financial penalties on errant bank executives. There is some merit in his argument that these moves and the banks’ eagerness to please are delivering worthwhile reforms that would only be complicated and delayed under Labor’s plans for what would be a costly and unwieldy royal commission.