How have ATM fee arrangements changed?
Prior to the reforms, each time you made an ATM transaction at an ATM not owned by your own financial institution, your financial institution paid a fee to the ATM owner for that service (the interchange fee). That fee was then often passed on to you as a ‘foreign fee’. Foreign fees were typically much higher than the cost of an ATM transaction and had increased over time. As part of the reforms, the fee that financial institutions pay to ATM owners has been eliminated. Instead, the ATM owner now recovers the fee directly from you as a direct charge, which is displayed on the screen before you commit to the transaction. At this point, you have an opportunity to cancel the transaction without charge or proceed. Under the new arrangements, banks are free to determine ‘foreign fees’ charged to their customers for using another institution’s ATMs. Some banks have chosen to continue to apply such fees, but at a lower level than prior to the reforms. But the Reserve Bank is of the view that,
