ATM access

[Dave Birch UPDATED] In the U.S. ATM fees are going up, as they should be: the average number of transactions per ATM has fallen by (if my arithmetic is correct) about two-thirds over the last decade. Therefore the cost per transaction should have gone up quite a bit. Bank of America’s decision to raise the cost of an ATM withdrawal to $3 may therefore be well calculated (because they have more deposit accounts and associated ATMs across the nation than others, so they have the strongest potential to gain rather than lose. Meanwhile, in the U.K., where according to VocaLINK the average number of transactions per ATM has fallen by a third in the last five years, there are going to be more “free” ATMs: 600 more, in fact. The government, via the Treasury, has struck a deal with banks and cash machine operators to increase free access to cash. Ed Balls said:

The free cash machines…

I didn’t read any further, because they’re not free, of course. They are paid for by other bank customers. The deal is that to persuade the cash machine operators to set up and maintain cash machines free-of-charge, banks and building societies agreed to pay a ‘financial inclusion premium’. This scheme, which will compensate cash machine operators for the expected lower cash machine-use in these areas, began on 1 March 2007 and will be funded through the transaction fee banks and building societies are charged when their customers use other cash machines.

Technorati Tags: ATM, costs, government

One thing that ATMs in the U.K. don’t do is to dispense fivers any more. The governor of the Bank of England, Mervyn King, was worried about this because it meant that £5 notes have become “scruffy” and the Bank was going to look at how it can encourage commercial banks to issue more £5 notes, the number of which has fallen compared with other denominations. (This was all before they had other things to worry about, like Northern Rock, for example). Mervyn said the bank had £1bn worth of £5 notes in its vault but commercial banks did not want them. They find it cheaper to issue £10 and £20 notes and so the shortage of new fivers means that the ones in circulation are “noticeably soiled and scruffy”. The British Bankers Association chief executive Angela Knight pointed out that £100 was the average amount taken out of ATMs at one visit. I say stop wasting money on fivers and twenties and above, and just standardise on tens. Much cheaper all round.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]