Do you choose to pay the $2 ATM fee for the sake of convenience?
Do you choose to pay the $2 ATM fee for the sake of convenience? Australians are still forking out more than half a billion dollars in ATM fees per year, instead of using their own banks’ ATMS for free.
According to financial comparison website RateCity.com.au, which analysed data from the Reserve Bank of Australia (RBA), around 40 per cent of ATM transactions were made using third-party or ‘foreign’ machines last year, costing an estimated $548 million in obligatory fees.
Sally Tindall, Money Editor at RateCity said on Monday, "Half a billion dollars a year is an excessive amount of money to be spending on accessing our own money."
According to RateCity, on average, one in three Australians still pay the $2 or $3 transaction fee, with 40 per cent of women and young adults more likely to pay the fee for the sake of convenience. Comparatively, around 27 per cent of Baby Boomers admitted using a third-party ATM.
Additionally, Ms Tindall said that despite the availability of everyday accounts that promise to refund ATM fees irrespective of which outlet the customer uses, only five per cent of Australians were choosing to use these accounts.
An RBA report released last week revealed that since the industry reforms to pricing arrangements that took place in 2009, direct ATM charges have increased and transactions have waned. The decline in the number of overall ATM withdrawals reflects the growing trend for customers choosing to make electronic payments rather than cash.
How much Australians have paid in ATM fees:
- $548m year to January 2016
- $596m year to January 2015
- $683m year to January 2009
- $815m year to January 2008
Last year we paid more than $500 million to withdraw our own money, and it’s not just other banks’ machines that we’re using – it’s third-party ATMs as well.
At the start of 2010, 47 per cent of ATMs were independently owned. Last year, this number had risen to about 55 per cent. The two biggest ATM networks in Australia are DC Payments and Cashcard, owning 7251 and 4691 ATMs respectively. The Commonwealth Bank, which is known to have more ATMs than any other bank, owns just 3822.
But we’re not just forking out to use ATMs. Rather than absorbing the related card fees, it has become common practice for businesses to pass the fees on to customers. Having worked in hospitality for many years, I understand the importance for businesses to have a credit and EFTPOS limit on payments – usually $10 is reasonable, though it’s common nowadays for the minimum transaction to be around $20. But some cafes, restaurants and bars are now applying $2 fees on top of each transaction made as well, so not only are customers subject to minimum transactions amounts, but also for their right to choose to pay with card over cash.
So what are your options? It seems that paying a fee to access your own money is becoming unavoidable. If you use cash, you’ve probably paid a fee at an ATM to withdraw it; if you use an electronic method of payment, you run the risk of being asked to pay for the privilege when you reach the counter. And, as if all that isn’t enough, depending on your savings account, your bank might even be charging you for using EFTPOS.
For those living week-to-week on a pension, all these transaction fees can be a real strain, and since the fees customers are required to pay differ between ATMs, banks and businesses, it can be tricky to know how to best manage your own money.
What do you think? Are you one of those Australian who’ll wear the transaction fee for the sake of convenience? Or will you go out of you way to find your bank’s ATM? Have you been asked by a business to pay an extra charge on top of your transaction?
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