The cost of withdrawing cash from an ATM in Australia varies depending on the banks and machines you use but it can often cost you $5 or more per transaction.
While the bank issuing your debit card could charge a “foreign transaction fee” if you use an ATM outside of their network, the ATM operator could also charge a service fee.
It is these charges that can make using a debit card more of an expense than a convenience.
Last year alone the cost of using a non-bank ATM cost Australian consumers a total of $660 million, with bank fees averaging $2 and ATM operator fees ranging from $1.50 to $3.
Banks Reward ATM Loyalty
The reason that some banks charge people for using ATMs outside of their networks tends to come back to cardholder loyalty.
Basically, banks want members to use their ATMs because it is more affordable, and charging a fee for foreign ATM use acts as motivation for cardholders to work within their network.
Alliances between different banks have also made it easier for people who have debit cards from smaller banks to avoid these fees.
People with St George debit cards, for example, can avoid fees by getting cash from St George, Westpac, BankSA and Bank of Melbourne ATMs.
The same applies for these other banks, while most credit unions are already partnered with bigger banks like ANZ and the Commonwealth Bank.
Paying For A Service
Unlike the charges your bank may apply, the ATM operator fees are in place purely for good business.
Independent ATM operators see their machines as offering a convenience and a service to people with debit cards.
These operators often have to pay for the machines to be installed and maintained, as well as rental for the ATM locations. As such, they reason that it is fair to charge customers a fee for the service.
But this system could change in the future, thanks to an innovative company in the USA.
Designed to offer people a more affordable way to access their cash, Free ATMs NYC has rolled out a number of machines that swap fees for short advertisements.
Instead of paying a dollar amount for using the ATM customers simply see ads as they wait for their cash.
Free ATMs NYC is a relatively new company, but there is already talk of something similar happening in Australia. And if ATM operators here can earn their money from ads instead of cards, the chances are good that $660 million figure will become a thing of the past.