ATM fees get reformed
(15 December 2008 – Australia) A reform package has been put in place by the Reserve Bank of Australia (RBA) to improve competition and efficiency in Australia’s ATM system.
The reform package, which will come into effect on the 3rd of March 2009, has been agreed upon by the industry and includes three key elements.
Firstly, the current bilateral interchange fees paid by financial institutions to ATM owners for the provision of ATM services will be abolished. These are the fees that financial institutions currently pass onto their customers’ as ‘foreign’ bank fees.
In replacement, ATM owners will have the ability to directly charge cardholders for ATM withdrawals, with any charge clearly shown before the customer proceeds with the withdrawal.
Finally, an Access Code will also be established by the Australian Payments Clearing Association (APCA) which sets out the conditions applying to new entries into the ATM market.
While the end customer may still pay a fee, the change is intended to add transparency and place downward competitive pressure on the cost of ATM withdrawals.
Competition is also set to be increased by the added incentive to deploy ATMs in a wider variety of areas and by a wider variety of competitors.
The actual amount, whether or not ATM owners will charge a fee to ‘foreign’ customers and if financial institutions will rebate the amount are all still undecided and is now up to each provider.
Firstly, the current bilateral interchange fees paid by financial institutions to ATM owners for the provision of ATM services will be abolished. These are the fees that financial institutions currently pass onto their customers’ as ‘foreign’ bank fees.
In replacement, ATM owners will have the ability to directly charge cardholders for ATM withdrawals, with any charge clearly shown before the customer proceeds with the withdrawal.
Finally, an Access Code will also be established by the Australian Payments Clearing Association (APCA) which sets out the conditions applying to new entries into the ATM market.
While the end customer may still pay a fee, the change is intended to add transparency and place downward competitive pressure on the cost of ATM withdrawals.
Competition is also set to be increased by the added incentive to deploy ATMs in a wider variety of areas and by a wider variety of competitors.
The actual amount, whether or not ATM owners will charge a fee to ‘foreign’ customers and if financial institutions will rebate the amount are all still undecided and is now up to each provider.
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