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Hole in the Wall

Hole in the Wall, hole in your pocket?

Thursday, 10 February 2005

-Growth in fee-charging ATMs is customer led-

The number of fee-charging ATMs has soared in the last 12 months, with customers paying £140 million a year to withdraw money from ATMs (Nationwide Building Society).  Fee-generating operators have faced widespread criticism for charging consumers to withdraw money - but who is actually complaining?

The majority of fee-generating ATMs have been installed by Independent ATM Deployers (IADs).  These are commercial organisations that, unlike banks, do not have other financial products to supplement the costs of installing and maintaining ATMs.  IADs claim that their ATMs are located at sites not covered by non-charging ATMs.  However, approximately 8% of fee charging machines are located within 100 metres of a free ATM (Nationwide Building Society). At these locations, the consumer has a choice.

Of the 50,000 ATMs deployed in the UK, it is estimated that some 20,000 are fee charging, but cash withdrawn from fee charging ATMs represents only 3% of the total cash withdrawn from all ATMs (LINK).  More fee-charging hole-in-the-wall machines are being introduced because people would rather pay a fee than not have the service all.  In addition, these ATMs earn money for the owners of sites where they are installed. 

Geoffrey Down, managing director at Savantor commented:  "If the trend for usage of fee-charging ATMs continues, fee generation has grown 133% over the last 12 months (Nationwide Building Society), we may be faced with all ATMs charging consumers.  Current account holders might return to the practice of cashing cheques in banks to obtain money.  This option might prove problematic for many banks, as they have moved the branch facilities away from cashier interfaces to product sales points.  As an alternative, facilities that offer a cash back service such as supermarkets might become a more popular option and be utilised further."

He added: " The Building Society Association has recently written to the Treasury Select Committee requesting fee-generating cash machine operators to display clearer warnings if they charge consumers for withdrawals. This seems only reasonable and the IADs would be wise to comply. But ultimately fee-charging ATMs are offering a service that is paid for and the consumer has the choice to use the service or not."



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