Aussie ATM Operators Hike Access Fee to $2.50

The new ATM withdrawal fee is now $2.50 from $2, comparison Web site Mozo said, which would boost the income of ATM operators by $600 million.

The fee increase came despite assurances from politicians to reduce the cost of accessing their money. The increase was triggered mainly by hike on ATM fees made by two main independent ATM operators outside the major banks. The two, Customers Limited and Cashcard, operate about 30 per cent of the ATMs around Australia.

Mozo Managing Director Rohan Gamble said the biggest losers in this development are depositors because the large banks would likely increase their ATM access fees also to $2.50. He said this is an indicator that the Reserve Bank of Australia's (RBA) 2009 ATM reforms failed.

The reforms ensured that customers would be charged by ATM owners instead of the banks and for the cash machines to display the cost of the transactions before the depositor confirms the transaction. Despite the objective of the reforms to pressure cost of ATM withdrawals to go down, ATM fees had actually been going up since 2009.

In comparison to other nationalities, Australians pay the average on22 per cent in bank fees compared to Britons and 11 per cent more than Americans. The Australian household average was $1,000, the Briton $749 and the American $850, according to Fujitsu Consulting.

One way Australians could avoid paying higher ATM fees is to use more of their credit or debit cards even for small purchases. Figures released by the RBA showed that the average transaction value for debit and credit card went down to a record low of less than $90 in January. For the same month, number of purchases made via debit cards went up 12.5 per cent to 207 million while that made through credit cards also increased at the same rate to 142 million.

Besides the growing popularity of debit and credit cards, technology was pointed as the reason behind the demise of the cash as people opt to pay using their mobile phones, Internet banking and tap and go cards, explained CommSec economist Craig James.

One good trend observed by Mr James as Aussies veer away from cash is the higher preference for debit cards which grew four times the rate of credit card accounts. ATM withdrawals also dipped drastically, the smallest for any January in the past six years.

For January 2012, Aussies withdrew from ATMS only 64.7 million times down from 65.6 million compared to the same month in 2011. The dip in ATM withdrawal was even more noticeable in December 2011 when Aussies withdrew cash from ATMs only 71.9 million times compared to 73.6 million times in December 2010.