ATM direct charging starts on 3 March 2009

The Australian Bankers’ Association (ABA) says customers need to be prepared for this week’s ATM direct charging reforms which are required by the Reserve Bank.

From 3 March 2009, there will be a significant change in the way bank customers pay for certain ATM transactions. The change affects the way customers are charged for using ATMs in Australia that don’t belong to your bank or aren’t in a networked arrangement – these are referred to as ‘foreign ATM transactions’.

David Bell, Chief Executive of the ABA, said: “The cheapest way for customers to complete ATM transactions is to use their own-bank ATMs or an ATM in a network arrangement with their bank.”

“It will be more expensive to use ATMs which are operated by other financial institutions or companies, or one that is not networked top your bank because the ATM operator will charge you directly. Depending on which bank to which you belong, you could also be charged a foreign ATM fee,” he said.

“If you use ATMs frequently and incur excess fees, visit your bank or call them to discuss the best account for your needs. Many banks offer accounts with unlimited ATM transactions for a flat account fee. Or many offer accounts with a large number of free ATM transactions before reaching a limit if you use your own-bank or a networked ATM.”

Tips to Minimise Fees under new ATM direct charging rules

• Use your own banks’ ATMs or a fee-free networked ATM;

• To find your closest networked or bank ATM – contact your bank. Telephone banking staff will help locate the closest ATM or bank websites have tools to locate your nearest ATM – wherever you are in Australia. Some banks also have SMS tools. For example, you SMS your suburb and state a telephone number and the bank will reply with the addresses of local ATMs;

• Where possible, make your payments online or over the phone to help limit your cash withdrawals. At the same time, you can check your account balance;

• Ensure you don’t authorise a transaction that is too costly. In a foreign ATM transaction, remember the screen will disclose the ATM operator fee, and it is your choice whether or not to pay it;

• If you want to avoid/minimise ATM operator fees, consider using EFTPOS and getting cash out with a purchase. Additional cash from supermarket purchases are popular;

• If you frequently use an ATM which does not belong to your bank, consider making larger withdrawals so that you incur fewer ATM operator fees;

• Choose a bank account that lets you complete ATM transactions at your own bank or a networked ATM at low cost. Some transaction accounts offer unlimited free ATM transactions for a flat fee or a number of free ATM transactions before reaching a limit; and

• If your bank does not have a large fleet of ATMs, customers can avoid an ATM operator fee by using their ATM card in a way that is advised by their bank or choosing a product which may minimise these fees. Contact your bank to discuss your options

ATM direct charging is an industry initiative undertaken in response to the Reserve Bank of Australia’s demand that ATM reform principles be voluntarily implemented. From March 2009, the ATM operator must disclose on the ATM screen the amount it will cost the customer to use the machine. If the customer decides it is too high, the customer can cancel the transaction at no cost.

There are around 26 000 ATMs in Australia. Banks only own 11,200 (43%). The rest are owned by credit unions, building societies and independent deployers.

For more information visit the Australian Bankers Association website www.bankers.asn.au