Out-of-network ATM fees are dropping

By August 19, 2016Bitcoin Business
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ATM Usage

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The average fee assessed to consumers for using an ATM not affiliated with their bank decreased slightly, according to the latest edition of the semi-annual MoneyRates Bank Fees Survey.

When consumers use an out-of-network ATM, they’re typically assessed two fees: one from the customer’s own bank, and one from the ATM operator. Both of those fees, which had previously been trending higher, declined slightly since the previous edition of the survey, published in March:

  • The fee assessed by a customer’s own bank is now $1.60, down 13¢.
  • And the average fee that banks or ATM operators charge non-customers dropped by 7¢, to $2.80 overall.

Customers are using ATMs less frequently, particularly when they’re out-of-network.Millennials still like to use cash — a survey from BI Intelligence, Business Insider's premium research service, found that 44% of millennials would be unwilling to stop using cash, even if electronic payments could replace all cash transactions.

But when they use ATMs, just 33% use ATMs outside of their bank’s network, indicating that when this population does use cash, they’re unwilling to pay a premium for it. That could be leading to declines in non-bank ATM usage over time, which might be prompting banks and ATM operators to lower their fees in order to bring customers back.

A new court case could cause further declines going forward. The US Supreme Court recently announced plans to hear appeals from Visa, Mastercard, and major banks in a case accusing those parties of implementing ATM fee structures that prevent fee competition.

The plaintiffs in the suit believe that Visa, Mastercard, and major banks colluded to prevent ATM operators from passing on cost savings from non-Visa and Mastercard options to consumers in the form of lower fees, The Wall Street Journal. If the court decides against card networks, it’s possible there could be more fee variety or continued decline across the board.

ATMs are just one piece of the broader payments ecosystem, which includes card networks, issuers, vendors, acquirers, processors, and more.

Evan Bakker and John Heggestuen, analysts at BI Intelligence, have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends.

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  • 2016 will be a watershed year for the payments industry. Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices.
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  • Alternative technologies could disrupt the processing ecosystem. Devices ranging from refrigerators to smartwatches now feature payment capabilities, which will spur changes in consumer payment behaviors. Likewise, blockchain technology, the protocol that underlies Bitcoin, could one day change how consumer card payments are verified.

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  • Analyzes the alternative technologies, including blockchain, which could further disrupt the ecosystem.

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