It may surprise you to know that ATM machines were not popular when they first appeared. Consumers were wary of letting a machine handle their money, and they greatly preferred face-to-face interactions. But ATMs are much more profitable for banks as they don’t require paying a friendly smiling face to greet customers. So to help consumers discover the advantages of ATMs banks initially made them free to use and charged for using a teller. Charging for the teller did turn out to be a well received idea, nevertheless ATM use skyrocketed.

Free ATMs?
Those days are long gone, although there are still some ATMs or banks that offer free service. Often this is a promotional move on the part of the bank – don’t worry, they make their money somewhere else. While there may be a handful of free banks in your area, it is more likely you’re using the ATM that is most convenient. It’s also very likely you’re paying dearly for the privilege.

ATM Fees
It is estimated that banks make more than $1 to 2 billion on ATM transactions each year. It costs a bank slightly more than a quarter for a customer to use an ATM, but when that customer comes inside to speak to a representative, the bank must pay significantly more for the same transaction. So to discourage consumers from actually visiting with bankers, some banks started to charge a fee for a face-to-face encounter. Others simply make their ATMs too prevalent to pass up. These are the ATMs on every street corner and inside your favorite institutions.

There are two kinds of ATM fees. If you use an ATM offered by your own bank, you most likely won’t pay a fee, though some banks have instituted fees irregardless of the transaction origin. But for most the fee for these bank owned ATM is nothing, after all, you are a customer of that bank. In the cases in which banks are starting to charge their own customers to utilize the ATM, the fee is similar to the fee charged by a bank that is not your own when you use their ATM machine.

Those ATMs not owned by your bank will most assuredly have a fee. If you are a customer of Bank A, but use Bank B’s ATM machine, Bank B will charge you a fee. The fee is usually $1.50-$3, and Bank B will tell you upfront that you will be paying this extra fee to use the machine. But there is another fee that is not upfront. If you go outside of its network, it is likely that Bank A will charge you a fee, too. That means you might be paying $3-$5 every time you visit an ATM not owned by your own bank. Even if you visit an ATM of your own bank, you may be paying $1.

Free ATM Service
There are banks that offer free use of ATMs to their customers. This is important if you visit ATMs frequently that are not owned by your own bank and especially important if you use online banking. After all, online banks won’t have any ATMs or friendly retail establishments, so you must consider how much you’ll pay in ATM fees to access your money.

The banks that offer free ATM use to their customers are not charging their own fee and some go so far as to refund the fee charged by the other bank. This service is generally offered by smaller banks, online banks or credit unions. Other free ATMs are offered by convenience stores looking to get customers in the door. Be sure to see if these free ATMs are eliminating both fees or just the initial fee to determine just how free it truly is.

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