STRATEGIC PARTNERS
A proposal to raise the surcharge cap from $1 to $1.50 is generating remarkably little noise in Wyoming.by Ann All, editor
April 15, 2002
Unlike most states where there is a debate over ATM surcharges, Wyoming is encountering remarkably little controversy over a proposal to raise its surcharge cap from $1 to $1.50.
The state Division of Banking studied the surcharge at the request of Wyoming legislators. "They wanted to determine a level that would permit competition and still benefit the public," said Marlene Aitchison, the division's project coordinator.
Dave Johnson, executive director of the Wyoming Bankers Association, acknowledged that it's unusual for a fee increase to originate with state lawmakers. However, he said, the legislators are "right on" with their proposal.
The division surveyed state and national banks in Wyoming, examined the fee structures of surrounding states and assessed the operating costs of different types of ATMs. Their conclusion: Because of Wyoming's sparse population, many machines don't get enough transaction volume to make money -- or break even -- with a $1 charge.
According to Aitchison, a state statute actually allows for a cap as high as $2 -- with a provision that the banking commissioner must set the maximum. The division recommended a $1.50 cap after determining that was a common charge in nearby states.
The state is accepting public comment on the proposal through Oct. 4. All comments must be submitted, in writing, to the division. Address correspondence to: Wyoming Division of Banking, Herschler Building, 3 East, Cheyenne WY 82002.
If approved, the new fee structure could be in place by December.
Noting that it was still early in the process, Aitchison said there has been no public outcry. In fact, there's been little reaction of any kind. "I haven't really heard anything yet."
Johnson doesn't think many consumers will be fazed by a 50-cent increase. "It's a pretty gentle movement," he said.
The proposed increase "will allow machines that are already in place to become profitable and remain in place," as well as clear the way for new ATMs, Johnson added. "I think there's room for additional growth in some areas, such as along the I-25 and I-80 corridors."
Neil Clark, national sales director for ATM Express, an ISO based in neighboring Montana, agreed with Johnson. "We haven't marketed the area hard yet -- because of the cap -- but we will," he said, noting that ISOs must be sponsored by a Wyoming financial institution to do business in the state.
It's been difficult to make a profit in all but the most populous areas of Wyoming, Clark said. "You've got like 500,000 people in the whole state. You've got to hit the real high-traffic areas, or the card base just isn't there."
Even with the surcharge increase, ATM Express will likely place machines of its own only in highly-populated or tourist-friendly areas such as Cheyenne, Sheridan or Jackson Hole. But the company also sells machines and provides service to retailers, and Clark predicts more of them will enter the market.
"They can own a machine where they'll do 100 transactions a month and make some money," he said.
