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ATMs and The Hidden Cost of Convenience

BILLSHRINK ATMS AND THE HIDDEN COST OF CONVENIENCE AVERAGE FEE FOR USING ANOTHER BANK'S ATM AVERAGE FEE FOR USING HOME BANK'S ATM $2.00 2009 2008 $1.50 2009 2008 $1.00 $0.50 $0 $1.78 $1.97 $1.25 $1.46 72% OF BANKS CHARGE YOU A FEE TO USE ANOTHER BANK'S ATM BANKS MAKE $2 BILLION A YEAR ON ATM CHARGES WHERE DO THE FEES COME FROM? ATMS CAN COST $9,000 - $50,000 DEPENDING ON THEIR FUNCTIONS MAINTENANCE COSTS ARE $12,000 - $15,000 ATM PER YEAR (CASH REPLENISHMENT, SERVICING, DATA COSTS, ETC.) WHEN ATMS WERE FIRST INTRODUCED BANKS CHARGED A FEE FOR NOT USING AN ATM "Human Teller Fees" ORIGINALLY, YOU COULD ONLY USE YOUR OWN BANK'S ATMS ATM ATM BANK A BANK B IN THE '80s BANKS FORMED "Shared ATM Networks" This allowed customers to access money in their bank accounts, even from other bank's ATMS. ATM ATM ATM Banks paid the network a fee per each transaction, as well as an annual membership SHARED NETWORK fee. Originally, these fees were not passed onto the BANK A BANK B BANK C customers. AS ATM USE INCREASED BANKS GRADUALLY BEGAN TO CHARGE FEES "Foreign Fees" ALSO KNOWN AS "OFF-US" FEES WERE CHARGED WHEN A CUSTOMER USED AN ATM OWNED BY SOMEONE ELSE TOTAL U.S. ATM MACHINES 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 00, 66, 86, L6, 96, "01 '02 *03 '04 '05 '06 SOURCE: AMERICAN BANKING ASSOCIATION ATM FACT SHEET LATER, BANKS BEGAN CHARGING FEES WHENEVER A NON-CUSTOMER USED THEIR ATM TO ACCESS ANOTHER BANK NOW, THE CUSTOMER IS CHARGED TWICE HOW CAN I SAVE MONEY? When using ATMS, withdraw more. When paying for your groceries, get cash back. Use your own bank or credit union whenever possible. Get a bank, like E*Trade, that will reimburse you for ATM fees.

ATMs and The Hidden Cost of Convenience

shared by Kristofferson on May 24
ATM fees were not originally passed on to bank customers, but banks have transformed convenience fees into big business. Here’s a look at how the ATM machines and networks have become sophisticated ...



E.J. Fox


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