SYDNEY -- Australia's "Big Four" banks have joined a group of credit unions and building societies to form a working party to examine ways to reduce ATM charges, possibly by up to 25 percent, according to a report in The Age.
The Reserve Bank of Australia supports a more competitive ATM system. (See related story Australia waits for interchange reform)
In its 2000 report on credit and debit card interchange fees, the Reserve Bank estimated the actual cost of an ATM transaction at 50 cents, compared with the average fee of $1.35 for using an ATM owned by a bank other than a customer's own. According to the report, in 1999 banks reaped $230 million in ATM interchange fees, with 30 percent of all ATM transactions done on foreign machines.
Currently, customers who use a "foreign" ATM are charged by both banks. Unlike the U.S., where customers are notified of surcharges -- although not foreign fees -- at the time of the transaction, Australians are not notified any charges at the ATM. It is believed that under the changes being considered, a fee disclosure would appear on Australian ATM screens.
The customer would then be free to either pay the charge and have it directly debited by the "foreign" bank from their account at the time of the transaction or find another ATM.
A banking source told The Age that the working party was looking at making ATM prices more transparent for customers by telling them straight away how much they will be charged for using a foreign ATM.
The proposed changes are similar to those proposed by Westpac Banking Corp Ltd early last year.
Theoretically at least, the changes would open the market to more non-bank ATM owners.
The new measures are expected to be announced, along with the Reserve Bank's final reforms for the credit card industry, some time after July.
