Chase trials higher ATM surcharge fees in two states
As part of a trial, JPMorgan Chase & Co. is charging non-bank customers in Illinois and Texas higher surcharge fees to withdraw funds from the bank's network of ATMs.
The New York-based bank is charging Illinois users a $5 surcharge fee and customers in Texas a $4 surcharge fee. Before the trial, which began February 8, Chase charged non-bank customers in both states a $3 surcharge fee.
The test affects about 3,600 ATMs in the two states. In a statement, the bank said it created an ATM network for the benefit of its customers, and it is appropriate to charge non-customers a fee. Chase-branded ATMs deployed in Walgreens stores in Illinois and in Texas are not part of the trial.
Banks are imposing higher ATM surcharge fees because the Dodd-Frank Wall Street Reform and Consumer Protection Act cut off some revenue streams, and banks are looking to makeup the loss revenue by raising ATM-surcharge fees.
The bank has made a safe move, said one analyst.
"There is very little downside when a bank raises its ATM surcharge fee, " said Greg McBride, senior financial analyst at Bankrate.com, which is based in North Palm Beach, Fla. "There is very little backlash from non-bank customers who pay the higher surcharge fee."
By raising its surcharge fee, Chase may actually attract new customers because it operates such a large number of ATMs, McBride said.
"Some cardholders may switch to Chase to have access to its ATM network," he said.
Chase Bank, the consumer and commercial banking business of JPMorgan Chase & Co., operates more than 16,000 ATMs, making it the nation’s second-largest ATM operator.
Topics: Bank / Credit Union