Interesting that you mentioned Portugal. Portuguese ATMs charge no fees for Portuguese card-holders (even outside of your own bank)!
I think fees are allowed by law, but no bank is stupid enough to charge them. You do pay ten euros a year for card maintenance, but that's not really a major thing.
luispedro
· 3 years ago
I think that it's possible a system where banks do charge the other bank a fee, but this bank chooses not to pass it to the customer.
All in all, things should even out, and no bank will be actually paying any other bank any large amount of money. Net result: the right, strong, incentives for ATMs to pop up and no fees for the customer.
John Hall
· 3 years ago
I've lived in both Iowa and currently NYC and I gotta say that comparing the ATM situation in both of those areas is like apples and oranges. Iowa and all other small towns are virtually impossible to get around without cars. That alone creates a different atmosphere. Furthermore, 99% of stores in Iowa (and rural America I presume) accept debit cards and credit cards because most of the stores are national chains or compete against national chains which accept them. In 6 years in Iowa and 3 in Indiana, I don't think I went to more than 2 places that didn't accept cards.
However, in NYC (for only three weeks), I've been plenty of places that don't accept cards unless you make like 15-20 in purchases or at all, but I would say 25-50% of these places had their own ATMs in the store (for a fee of course).
It's a different economy to compare against. In a driver-dominated economy, it costs very little to stop by the ATM at one point of your trip if you know a place you're going won't accept your cards. In the city, I'm rarely more than 4 or 5 blocks from a Chase ATM and rarely more than a block away from a fee-charging ATM.
James
· 3 years ago
luispedro,
I'm curious. Where do you think the banks would get the money from to pay fees to each other?
Ammonium
· 3 years ago
I'm pretty sure that all of the credit card companies prohibit retailers from mandating a minimum charge for credit cards. Retailers may put out signs about a minimum fee, but it's against their contract and they could be reported.
It seems like most anywhere I use an ATM there are at least 3 ATMs sitting next to each other or on the same block. It's pretty likely that one of them won't charge me a fee, even though I have a small bank from another region of the country.
The worst fees are at ATMs in bars. I suppose if you're drunk and the bar is full, you probably would rather pay the money then having to walk around looking for a cheaper ATM and then wait in line to get back into the bar. I think I also remember some really high fees once in a casino.
Bob Smith
· 3 years ago
I think that it's possible a system where banks do charge the other bank a fee, but this bank chooses not to pass it to the customer.
That's what USAA Bank does. They reimburse you for up to $12/month in ATM fees. Note that since they do that once a month, after the fact, low account balances can end up costing you overdraft fees, too.
Ted
· 3 years ago
Ten euros a year sure sounds like an ATM fee to me. Most years I don't pay $12 worth of ATM fees.
James R Ament
· 3 years ago
The best way to create change with ATM's is don't use them. When I travel, I make heavy use of credit cards and plan ahead so that I have "enough" cash merely as backup or for the piddling small purchases. The cash is secured when I go to the bank approximately once evry two weeks. This isn't difficult - I've used an ATM exactly once in my life.
James
· 3 years ago
Bob,
Aside from their customers, where would a bank get money to cover the costs that it incurs, such as the cost of reimbursing ATM fees?
John Thacker
· 3 years ago
I have seen a place where a locational monopoly did come into play-- but that was aboard a cruise ship.
luispedro
· 3 years ago
"I'm curious. Where do you think the banks would get the money from to pay fees to each other?"
From the fees they charge each other. Its like check clearing: If bank A owes bank B 100 and bank B owes bank A 99, only 1 dollar changes hands, but more than one bank can be involved.
I think that it should even out: bigger banks have more customers but more ATMs, as well. So they get more charges to pay, but receive more as well. Net balance: around zero.
As for 10 euros/year being like ATM fees. No, they are not. I am yet to pay a fee in the US, but I take care not to use other banks' ATMs and carry a lot of cash. I did lose in convinience. The extra convinience sure is worth $10/year, but not $2/withdrawal.
tv bracket
· 1 year ago
My suggestion is for everyone to use debit card instead! Or Credit card would be even better. For city people, ATM withdrawal can pushed to zero. There is no need to carry lots of cash everywhere. We could probably ask the accounting dept. to make the paycheck partially in small cash also, so no need for actual ATM withdrawal. At least it is workable at my place.
All Comments
Interesting that you mentioned Portugal. Portuguese ATMs charge no fees for Portuguese card-holders (even outside of your own bank)!
I think fees are allowed by law, but no bank is stupid enough to charge them. You do pay ten euros a year for card maintenance, but that's not really a major thing.
I think that it's possible a system where banks do charge the other bank a fee, but this bank chooses not to pass it to the customer.
All in all, things should even out, and no bank will be actually paying any other bank any large amount of money. Net result: the right, strong, incentives for ATMs to pop up and no fees for the customer.
I've lived in both Iowa and currently NYC and I gotta say that comparing the ATM situation in both of those areas is like apples and oranges. Iowa and all other small towns are virtually impossible to get around without cars. That alone creates a different atmosphere. Furthermore, 99% of stores in Iowa (and rural America I presume) accept debit cards and credit cards because most of the stores are national chains or compete against national chains which accept them. In 6 years in Iowa and 3 in Indiana, I don't think I went to more than 2 places that didn't accept cards.
However, in NYC (for only three weeks), I've been plenty of places that don't accept cards unless you make like 15-20 in purchases or at all, but I would say 25-50% of these places had their own ATMs in the store (for a fee of course).
It's a different economy to compare against. In a driver-dominated economy, it costs very little to stop by the ATM at one point of your trip if you know a place you're going won't accept your cards. In the city, I'm rarely more than 4 or 5 blocks from a Chase ATM and rarely more than a block away from a fee-charging ATM.
luispedro,
I'm curious. Where do you think the banks would get the money from to pay fees to each other?
I'm pretty sure that all of the credit card companies prohibit retailers from mandating a minimum charge for credit cards. Retailers may put out signs about a minimum fee, but it's against their contract and they could be reported.
It seems like most anywhere I use an ATM there are at least 3 ATMs sitting next to each other or on the same block. It's pretty likely that one of them won't charge me a fee, even though I have a small bank from another region of the country.
The worst fees are at ATMs in bars. I suppose if you're drunk and the bar is full, you probably would rather pay the money then having to walk around looking for a cheaper ATM and then wait in line to get back into the bar. I think I also remember some really high fees once in a casino.
That's what USAA Bank does. They reimburse you for up to $12/month in ATM fees. Note that since they do that once a month, after the fact, low account balances can end up costing you overdraft fees, too.
Ten euros a year sure sounds like an ATM fee to me. Most years I don't pay $12 worth of ATM fees.
The best way to create change with ATM's is don't use them. When I travel, I make heavy use of credit cards and plan ahead so that I have "enough" cash merely as backup or for the piddling small purchases. The cash is secured when I go to the bank approximately once evry two weeks. This isn't difficult - I've used an ATM exactly once in my life.
Bob,
Aside from their customers, where would a bank get money to cover the costs that it incurs, such as the cost of reimbursing ATM fees?
I have seen a place where a locational monopoly did come into play-- but that was aboard a cruise ship.
"I'm curious. Where do you think the banks would get the money from to pay fees to each other?"
From the fees they charge each other. Its like check clearing: If bank A owes bank B 100 and bank B owes bank A 99, only 1 dollar changes hands, but more than one bank can be involved.
I think that it should even out: bigger banks have more customers but more ATMs, as well. So they get more charges to pay, but receive more as well. Net balance: around zero.
As for 10 euros/year being like ATM fees. No, they are not. I am yet to pay a fee in the US, but I take care not to use other banks' ATMs and carry a lot of cash. I did lose in convinience. The extra convinience sure is worth $10/year, but not $2/withdrawal.
My suggestion is for everyone to use debit card instead! Or Credit card would be even better. For city people, ATM withdrawal can pushed to zero. There is no need to carry lots of cash everywhere. We could probably ask the accounting dept. to make the paycheck partially in small cash also, so no need for actual ATM withdrawal. At least it is workable at my place.