STRATEGIC PARTNERS
February 21, 2002
HOUSTON -- The majority of consumers in areas that have experienced ATM surcharges -- or convenience fees -- over an extended period of time are fully aware of the charges they pay when withdrawing cash from machines not owned by their financial institution, as well as their options to avoid such charges.
Based on this understanding, consumers have changed their behavior and are making informed choices to obtain cash.
These are among key findings of a new research project by Dove Consulting Inc. and Analytica Inc. that studied consumer behavior and attitudes regarding ATM fees.
Commissioned by the PULSE EFT Association, the study reports that 86 percent of all consumers surveyed say they are adequately informed of charges they sometimes pay for ATM usage.
And 82 percent of consumers surveyed feel they have adequate access to cash without having to pay a surcharge.
The study was conducted among 700 ATM card users across seven states in PULSE's primary service area to assess consumer behavior in areas where such fees have been in existence for nearly a decade. The PULSE program was the first in the nation to allow the fees as a result of a court-ordered arbitration hearing.
"The findings are very significant because this is the first study of its kind ever conducted in a mature surcharging environment," said Tony Hayes, director of Dove Consulting.
"The study conclusions make it very clear that the marketplace is functioning well regarding ATM use," Hayes said.
Some other findings of the Dove study:
• ATMs remain consumers' preferred method of obtaining cash by a margin of eight-to-one over any other method.
• Even though 75 percent of consumers report using an ATM as their preferred method for getting cash, only 58 percent report that they ever have paid a surcharge.
• Of consumers who have paid a surcharge within the last 14 days, 96 percent reported that ATM fee disclosures are sufficient.
• Nearly 80 percent of surveyed respondents had not paid a surcharge in the previous 14 days.
• Consumers have responded to ATM surcharging by increasing debit and credit card usage and by getting cash from other sources more frequently.
• Nearly 59 percent of respondents knew that they could get cash back without a surcharge at point-of-sale terminals, and more than one-third had used that option.
PULSE CEO Stan Paur believes the findings represent a precursor of universal consumer response once surcharges have been experienced for a period of time.
"Since PULSE's environment is not unique, we can expect the same behavioral patterns from consumers nationwide as they adapt to convenience fees," he said.
Paur added that the findings support arguments that additional legislative or regulatory action at either the state or federal levels to require further disclosure procedures or to ban or limit fees is unwarranted and unnecessary.
Analytica Inc. and Dove Consulting Inc. conducted phone interviews with 700 consumers in Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi and Tennessee. These states are "mature" surcharging environments -- areas where surcharging has been permitted since before April 1996, when it began to spread nationwide.
The states were selected because consumers have had the most time to react to the fees, and are therefore likely to be indicative of the overall U.S. population once surcharging in other states becomes more established.
The report may be viewed and downloaded at http://www.pulse-eft.com/kits/2000/surcharge/surcharge.htm.
