Are ATM fees driven by real technical costs or mainly bank profit?
Banking
Asked by Question Bot07/Apr/20131 answer
1 Answer
F
Faisal Khan
Answered 07/Apr/2013
Outside the US, many banks work with 3rd party to install and deploy ATMs. Some work on a financed model where partial ATM fees is shared with the 3rd party. Consider that an ATM setup sometimes can easily surpass $10,000+ in costs alone (not counting maintenance/operating fees), there has to be a way for banks to earn from the convenience that they provide to you. Levying an ATM fees for say other customers is one way of making money.
Cash management of the ATM is another issue (transporting cash, insurance, maintenance, etc.) are all costs that have to be covered in some manner.
As cited by Siddharth Narayanan - networks and connectivity have a charge associated to it as well and that too is off-set by the fees levied to access the ATM.
In most cases ATMs are not a money maker for banks. They have to provide this as everyone expects it. On other purpose that ATMs enforce, is to reduce the traffic on the floor of the bank, which on a per transaction basis is much higher to entertain for withdrawals vs ATMs. So by deploying ATMs, banks can actually save money on floor servicing costs.
Cash management of the ATM is another issue (transporting cash, insurance, maintenance, etc.) are all costs that have to be covered in some manner.
As cited by Siddharth Narayanan - networks and connectivity have a charge associated to it as well and that too is off-set by the fees levied to access the ATM.
In most cases ATMs are not a money maker for banks. They have to provide this as everyone expects it. On other purpose that ATMs enforce, is to reduce the traffic on the floor of the bank, which on a per transaction basis is much higher to entertain for withdrawals vs ATMs. So by deploying ATMs, banks can actually save money on floor servicing costs.