14 Apr 2009

ATM charges

Just over a month ago, Australia introduced, for some reason, rules by which all banks would charge the customers of competing banks to use their ATMs, typically $2 a withdrawal. This has kind of fucked those of us who use a credit union, since credit unions don't have big ATM networks of their own. I expect this will in turn fuck credit unions, since customers would save money by moving to a bank with the largest networks. In general, the bank with the largest network will tend to profit from this – it's essentially an engine of monopolisation and not, as the RBA claim, an attempt to increase competition. In light of big banks in the UK and US getting into such trouble of late, it's possible for banks to demand that the government funnel all cash into them to keep them solvent, and I suspect that this is what's happening here.

The big news is a tiny bank, Bankwest, which pays its customers' charges at rivals' ATMs for them. However, the only reason Bankwest does this is because it will has to – this may also be the case for the credit unions, but whether they will be able to, or whether Bankwest can keep this up, remains to be seen. If people move their accounts to Bankwest in sufficient numbers, something might be done, I suppose, but there's not much inducement for people to do this if their current bank has a sufficiently large network, hence little inducement for the large operators to change their undoubtedly lucrative new charging policy.