It could also mean that there could be less ATMs outside of the major non-metropolitan areas of Australia, including the more remote parts of states like Tasmania.

The ABA was responding to comments made this morning by Greens Senator, Bob Brown¹.

The current system of direct charging at ATMs was required by the Reserve Bank as part of its payment system reforms. The Reserve Bank completed widespread community consultation before the system was introduced one year ago. The aim of the change was to make fees transparent, provide customers the choice of paying a fee or not and to increase the supply of ATMs in Australia.

When you use an ATM not operated by your bank or not in a networked arrangement², you’ll be shown an ATM operator fee displayed on the screen before you complete the transaction. If you don’t want to proceed, you can cancel the transaction at no cost.

Currently, there is a wide network of ATMs owned by banks or in networked arrangements which typically allow bank customers to use their own banks’ ATMs for free. 

David Bell, Chief Executive of the ABA, said: “Senator Brown’s anti-competitive proposal against bank customers could result in fees being paid by customers to use their own-bank ATMs because non-customers of the bank would be able to use the ATM service for free.”

“ATM fees are not a tax as Senator Brown asserts - they pay for the installation, maintenance, repairs, and upgrading of ATMs, as well as security.  If banks cannot recoup the costs associated with running their ATM fleets, then all these things might suffer.”

“Under this proposal, banks might have to consider limiting withdrawals to their own customers thus denying greater opportunity for customers to access funds – especially in emergencies.”

“It’s also relevant to note that banks own less than half of all ATMs in Australia - Senator Brown’s policy proposal is anti-competitive as he excludes credit unions, building societies and the independent deployers of ATMs.”

“We suggest that Senator Brown should withdraw his policy proposal and consult with experts in ATMs, including the Reserve Bank, the State and Territory Police – involved in ATM security, banks and other ATM deployers, as well as bank customers, who will be rightly aggrieved to learn that Senator Brown wants to make them pay ATM fees.”

“Perhaps this is policy on the run because consumers are well ahead of the Senator on this issue.  That is, use of own-bank ATMs is growing at a strong rate while use of foreign ATMs is falling at a record rate.  There was a massive fall of 65 million transactions at foreign ATMs over 2009.  At the beginning of 2007, foreign ATM transactions were just on half (49%) of all ATM transactions, this has fallen back to 40%.” 

“Also, the number of EFTPOS transactions which involve a cash-out is increasing at the fastest pace on record.  In fact, only two years ago foreign ATM transactions were almost double EFTPOS cash-outs (i.e. 91% more) now it has fallen sharply to 42% more.”

“When customers see the fee, they can decide whether they want to pay it or not. You can have the convenience of accessing cash there and then or decide to find an own-bank ATM or a networked ATM where no fee will be paid,” Mr Bell said.

Finally the ABA notes there are two inaccuracies in Senator Brown’s media release:

1. The Senator claims that banks make $680 million from ATM fees – this is incorrect. Australian major banks would not get $680 million as 53% of ATMs are not owned by banks.
   
   
2. The Senator claims that “….the average Australian spends around $1000 on bank fees….” This is also incorrect - the average Australian spends around $230 on all bank fees not $1,000.

 
Tips to Minimise Fees under ATM direct charging rules

• Use your own banks’ ATMs or a fee-free networked ATM;
• To find your closest networked or bank ATM – contact your bank. Telephone banking staff will help locate the closest ATM or bank websites have tools to locate your nearest ATM – wherever you are in Australia. Some banks also have SMS tools. For example, you SMS your suburb and state a telephone number and the bank will reply with the addresses of local ATMs;
• Where possible, make your payments online or over the phone to help limit your cash withdrawals. At the same time, you can check your account balance;
• Ensure you don’t authorise a transaction that is too costly. In a foreign ATM transaction, remember the screen will disclose the ATM operator fee, and it is your choice whether or not to pay it;
• If you want to avoid/minimise ATM operator fees, consider using EFTPOS and getting cash-out with a purchase. Additional cash from supermarket purchases are popular;
• If you frequently use an ATM which does not belong to your bank, consider making larger withdrawals so that you incur fewer ATM operator fees;
• Choose a bank account that lets you complete ATM transactions at your own bank or a networked ATM for free. Some transaction accounts offer unlimited free ATM transactions for a flat fee or a number of free ATM transactions before reaching a limit; and
• If your bank does not have a large fleet of ATMs, customers can avoid an ATM operator fee by using the ATM card in a way that is advised by their bank or choosing a product which minimises these fees. Contact your bank to discuss.