Why do consumers hate ATM fees so much?
Early last month, I came across something in an article published in Time* that bothered — no, irritated — me. "No More ATM Fees? Sign Us Up!," the headline ran.
This, wasn't the annoying part, though. Everyone knows there are no fees when you use your own bank's ATMs, right? So in effect, you're automatically "signed up" upon opening an account.
What really irked me about the Time article was this:
Consumers run into plenty of tacked-on charges in today’s world — hello airline baggage fees! — but the ATM fee, small as it is, is up near the top in terms of generating aggravation. There’s just something patently absurd and beyond annoying about paying money to get your money. (emphasis, Time)
You don't say. If ATM deployers had a dollar for every time someone moaned about ATM fees, they could all go to Aruba for a month and let cardholders rediscover the joy of queuing at the teller window during bank hours to cash a check.
Then it might dawn on them that it's not their money they're paying for, and that the bank is not holding their cash for ransom any more than the dry cleaner is holding their clothes for ransom until they pay up. Customers understand that they're paying for a service when they have their suit cleaned, and while they might not be happy about it, they're generally not writing to their representative to complain about having to pay to get back clothes that belong to them.
The problem is simply that consumers have not been taught to see the ATM as a service. And where education is absent, ignorance steps in with all kinds of silly notions, including one that says ATM surcharges are part of some vast Big Bank conspiracy to rip people off.
And the mainstream media doesn't help much when it conveys partial or incorrect information. A story by a Nebraska news station about the end of dual fee notices was so poorly researched that readers inferred they'd have no choice or control when it came to what they would henceforth be charged for transactions. "Now they can charge whatever they want and you won't know until after the fact," one reader commented.
In January 2013, I stumbled across an online post that so surprised me that I saved it on my laptop. In the comments section of an online news publication, a Siam Commercial Bank customer complained about being charged a fee for a "two-in-one" ATM/debit and credit card. "Banks will alienate customers," the subject line for the comment warned.
Below it was another post with a subject line that said, "Card charge allows ATM expansion." In it, a member of SCB corporate communications explained:
While the customer correctly [acknowledges] that there are operational fees associated with the provision of ATM services ... [she] underestimates the extent of the many operational fees involved. These include expenses associated with the rental agreements, maintenance requirements, telecommunications charges and more that are required to make an ATM network available.
To ensure that our customers are never far from an ATM location, SCB spends a considerable amount of money maintaining and expanding the largest ATM network in Thailand, in over 8,000 locations. ... [The new fee] will ensure that our customers enjoy the convenience of never being very far from an SCB ATM machine, and allow the bank to further expand our ATM services.
What struck me about this was not that someone needed to explain all of this to a customer, but that someone actually did.
This spring, publications in London reported on the shameful absence of bank-sponsored ATMs in a particularly poor part of the city. Residents had to pay a fee to use the sole, IAD-owned ATM in the area or hike some distance to the nearest bank-owned machine to get cash.
Rather than calling upon the banks to support their cardholders, a local MP arm-twisted the IAD into providing its services at no charge. Then people began to complain that this machine — which generated nothing but cost for the operator — wasn't being replenished often enough.
So it seems that legislators, too, must be taught that an ATM industry without the means to support itself has no incentive to serve the public.
After a lobbying junket in at the Capitol to push for new EFTA rules, one longtime industry member told me that legislators were mostly clueless about how networks operated. This is worrisome. Because when an entity that doesn't understand your business has control over its revenue-generating capacity, it's is not a good thing. When the entity begins to think that calling this capacity "usurious" is a winning campaign sound-byte, it's a really, really bad thing.
Fortunately, this is a problem that can be remedied. Even more fortunately, the ATM has the unique advantage of having customer education tools built right in — i.e., its video screen and receipt printer. What's more, it has a target audience that voluntarily steps up and stares at — and then pockets — this media on a regular basis.
Operators could be using these resources to tell the straight story about ATM fees: "Why aren't all ATMs free?" "Where do fees go?" "What is an ATM network, anyway?" "How much does an ATM cost?"
The industry should be chatting up a storm about itself, sharing important information in an interesting, non-sermonizing way. They could even be making it fun — and multichannel — for their audience with related trivia, interactive contests, and (to use that awful word) "gamification."
At the very least, operators could be setting up their machines to display the message, "What's it worth to you not to have to wait until tomorrow to go to the bank and wait in line to cash a check? $2.60? All right then. Let's have the card."
At a time when ATM operators are seeking new revenue streams, they also could be doing something inexpensive and effective to protect the ones they already have. Or they could wait — and fight for their livelihood on the Hill.
*The Time story was about Free ATM, a company whose business model involves helping IADs sell screen media time on their ATMs to advertisers. In theory, this would allow them to operate surcharge-free.
Suzanne Cluckey Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally. She is now the editor of ATMmarketplace.com and BlockChainTechNews.com www