

Coming Soon: The Five Dollar ATM Fee - pbj
http://blogs.wsj.com/deals/2011/03/16/its-coming-the-5-atm-fee/

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nanoanderson
In the UK, 97% of ATM transactions are done using free-to-use LINK-network
ATMs (<http://www.link.co.uk/> &
<http://en.wikipedia.org/wiki/ATM_usage_fees#United_Kingdom>). I feel that
there are situations where pay-to-use ATMs are acceptable as a matter of
convenience (convenience stores, subways, airports, etc.), but it boggles my
mind that I can go to RiteAid to buy a $1 juice bottle and withdraw $40
without penalty, but to use the Chase ATM across the street (I'm a Bank of
America customer) I have to pay Chase $2.75 AND Bank of America a $2.00 out-
of-network-ATM fee.

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jbooth
Maybe that'll be enough pricing pressure for someone to fix that stupid
system. Routine transactions shouldn't cost 2 bucks a pop.

Not sure how that works when the banks control too many of the pieces, though.

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r00fus
Go Credit Unions.

My credit union refunds ATM fees charged by other banks, and through their CU
network, all CU ATMs are free, and I can even walk into networked CU and do
some operations as if I were at the local branch.

Don't support the criminal banksters who aren't beholden to their depositors.

~~~
colanderman
The basic (and only) credit card my CU offers is fantastic. 10.90% flat APR on
EVERYTHING, and absolutely no fees. (This even includes cash advances.)

To me, credit unions are truly a "hacker's" bank. No frills or gimmicks leaves
room for more savings and better customer service than commercial banks. Kind
of like getting a barebones unmanaged VPS compared to managed shared webspace
from GoDaddy.

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masterponomo
The main issue banks are dealing with is the Congressional move to limit debit
card interchange fees. I have spent a good part of the past 25 years working
on systems that allow acquiring banks to claim the lowest interchange fee.
It's not a trivial process, and acquirers and merchants make significant
investments to improve things at the point of sale. They expect to recoup some
of that investment by paying lower interchange fees. For a simple example, one
of the earliest (circa 1985) distinctions was between electronically-capture
and paper-keyed transactions. Electronic qualified for a lower fee because it
was more secure, more accurate, and more timely. Then within electronic-
capture, the networks began rewarding quicker deposits--deposit within 7 days
and pay a lower rate, then 3 days, then 1 day. Now there are many, many
(perhaps 100's) of fee programs worldwide, with each card network having its
own rules and technologies. By crudely limiting fees to an unrealistic
0.12/transaction, Congress is destroying the marketplace effects that drive
innovation in the networks. Banks are justified in an equally crude reaction:
you take away our ability to price a service realistically over here, so I
guess we'd better raise another price over there.

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natnat
First of all, it's the Federal Reserve, not congress, who is limiting
transaction fees. Second of all, 12 cents is not an unreasonably low cost for
a transaction. The payment networks cost virtually nothing to operate, and
this becomes abundantly clear when you look at the profit margins of companies
like Visa and MasterCard, which are higher than virtually any other company
out there.

There is very little innovation in payment networks. There are established
players -- Visa and MasterCard -- who charge merchants 1% or more of every
purchase made. They pass along much of this money to banks, and payment
networks essentially end up competing on how high their fees can possibly be
so that banks choose their brand of card. And because the payment networks
demand that merchants charge the same price for cash or card, retailers are
forced to increase their prices for consumers who pay in cash.

If there were real competition, we would see payment networks competing to
lower their fees. But you don't see that.

~~~
masterponomo
I stand corrected. The point of sale devices, the card association IT systems
and networks, the bank IT and networks (a worldwide network that predated the
'net), the whole departments of people who support merchants, the fraud
prevention measures, the training, the government and card association rules
compliance--all integral parts of "the payment networks" are cost free. I
should have reasoned backwards from a company's profit margins and realized
that these infrastructure costs don't exist, and operating costs are an
illusion. I should have also realized that the move into chip cards, the use
of heavy-duty encryption, the rapid adoption of contactless payments products,
the support for e-commerce in a world where identify verification can be a
challenge, exposing the bank to untold risk, all are not innovations, they're
just the cost-free hobbies of some rich bank persons. Thank you for the
enlightenment, you smecking genius. I will now hang my head in shame for
speaking out of turn after actually working on these systems for a quarter
century and not realizing that it was so inexpensive.

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locopati
Chase can kiss my credit cards good by if that's the case. I don't hold
checking/savings accounts with Chase, but that doesn't mean I need to support
this behavior via their credit cards. Citibank is on the edge of being booted
as well for similar reasons. Hey banks, you are here to hold my money under
FDIC protection, not find ways to chip away at it.

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jameskilton
But, there's _always_ been a fee for using the ATM of a bank you're not a
member of.

Feels like FUD to me.

~~~
iaskwhy
Coming from a small European country, it's one of those things that you think
it's really weird about countries like United States. Here you can withdraw
money without paying anything from any ATM. I never even saw a ATM asking for
a fee.

When I went to NYC it wasn't easy to find ATMs without fees (and then there
was the problem of my card being part of the Maestro network which isn't
available everywhere).

~~~
colanderman
On the other hand, the few times I've been to the EU, it wasn't easy to find
public restrooms without fees :) In the US, I've never seen a public restroom
that charged.

(Actually I saw one, at a tourist destination in Martha's Vineyard, that had a
suggested donation. I was flabbergasted.)

~~~
iaskwhy
That's very true! The trick is to enter a cafe and ask for a bottle of water
while taking the chance to ask "oh, by the way, where's the restroom?"

~~~
colanderman
Ah, similar to how one gets "free" WiFi in the States by ordering some coffee
from a Starbucks :) I am touring Europe in a couple months and will keep this
in mind, thanks!

~~~
iaskwhy
I'd say it's the same logic but usually a bottle of water in Europe is much
cheaper than any coffee from Starbucks. :)

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kevinburke
I'd recommend switching to a bank account that refunds ATM withdrawals at
other bank ATMs. My bank - Ally Bank - has free ATM withdrawals at any ATM.
This easily saves me $20 a month in time and money.

~~~
streeter
I fully agree. Not only does Ally refund ATM withdrawals at banks in the US,
but also at banks overseas.

While slightly annoying to make deposits, it is worth it to not pay fees and
to be able to get money anywhere. And like most banks now, they offer easy
online bill pay for free.

~~~
kevinburke
Disagree about deposits actually - for me anyway it's way easier to put things
in my mailbox than to drive to the bank.

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jasonkester
I can never figure out why people complain about ATM fees. Especially when
those same people proceed to take $20 out of an ATM, thus maximizing the fee
($5/$25 = 20%!)

The math is not particularly difficult: Always take out the absolute maximum
that the machine will give you. $5/$505 =~ 1%. That's close enough to zero to
ignore. Feel free to stash most of that cash in your sock drawer if you don't
want to carry it around.

~~~
jonknee
... Most people who complain about said fees don't have the sort of funds to
do that. Not to mention not wanting to walk around with $500 (which you will
have to do unless the ATM happens to be in your sock drawer already).

~~~
jasonkester
OK, I'll grant you a window from birth up to two months after graduating from
college (I too remember transferring my last $10 from savings to checking so
that there would be a full $20 to withdraw). After that, you have no excuse
not to be able to pull $500 from a cash machine every couple months.

Remember, once it's out you don't have to spend it all that day. I tend to
pull cash out maybe once every month or so, depending on how much I go out.
It's really just life skills we're talking about. ATMs only enter the
discussion as a symptom.

~~~
jonknee
Besides the fact a lot of people have much less money than you, I think you
also use ATMs much differently. If you're not traveling the world, the primary
use of ATMs is getting cash when you need it, not getting out a large bulk sum
a few times a year which is then hidden and dolled out incrementally for times
you think you might need cash ahead of time. That can easily be done at the
bank when cashing those huge checks everyone apparently starts getting after
college.

~~~
jasonkester
That's the life skills I talked about above.

\- If you have a job and ever get to the point where you have only $500 in
savings, that is a huge red flag that you're doing something wrong. You should
immediately stop buying things and budget your income so that you're saving a
few hundred dollars a month, and endeavor never to get below a certain
comfortable pad. If you're in IT, you can easily get a $10k pad in place
within one year of having your first job. Once that's in place, _then_ you can
think about owning a television and other consumables. Not before.

\- If you regularly find yourself with no money in your wallet, that's a
symptom that you're not thinking ahead. I tend to keep between $50 and $200 in
my wallet. If I buy something and notice that I've only got a couple 20's in
there, I'll make a note to either stock up from the sock drawer or hit an ATM
when I get a chance. ATMs are a way to get money out of the bank. It's best
not to think of them as a replacement for your wallet (since that's the way to
maximize your fees).

You don't have to have lots of money to do these basic things. I was doing
them when I made $34k/year.

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alanh
Saw this announced on network news. The anchorlady said a $5 fee on a $100
withdrawal was like a 10% tax…

~~~
kbob
Aside from the obvious arithmetic error, they are not the same at all. Tax
revenues are spent on public works and societal benefits, whereas bank fees
are kept by the bank.

~~~
colanderman
Maybe that's why she doubled it.

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bartonfink
I can't tell if the article is talking about ATM fees for using an
unaffiliated ATM or if Wells Fargo is going to start charging people for using
Wells Fargo ATMs. The wsj links to another article that has one of those
obnoxious "click to continue reading" banners, which is where I stopped. Does
anyone know what this is actually talking about?

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nicksergeant
As a member of a bank who gives me my ATM fees back, I say bring it on.

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alanh
I see the benefit of belonging to such a bank, but if other banks “bring it”
might it become too costly for your bank to keep paying your fees for you?

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dman
Hope the banks push it too far and create a financial incentive for new
players in the finance industry.

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viggity
If you don't want to pay 5 for the fee, don't use the machine. It really is
that simple. The owner of the ATM has the right to charge whatever the hell
they want, it is their property, they have to service the machine why
shouldn't they get to pick how much to charge?

