The rise of the Generic ATM machines that charge a fee to use them

I don’t know about other parts of Australia, but here in South East Tassie it’s becoming more and more common for shopping complexes to remove all of their bank branded ATM machines and then leave shoppers with nothing but the generic red ATMs to use.

Personally I try to avoid these ones because there’s always a $2 fee involved to either access your money, or even just to check your bank balance. Luckily Woolies lets you get your money out for free, so I don’t have to use the generic red boxes that they’re trying to force us to use.

Do you think the generic ATM company is doing some deal with the management of these various shopping centres and is giving them a percentage of the fees in order to corner the market for ATM space?

If there were some deals being made in order to saturate the place with the generic branded ATMs that also ensures the rival ATMs were no longer being considered for the same space, effectively creating a monopoly for themselves in the shopping centre ATM market, could this be classed as an illegal practice of any kind? Curious.

6 Likes

Interesting theory @NubglummerySnr. Will flag this with our investigations team :thumbsup:

2 Likes

Found the below link re ATM usage .

http://www.news.com.au/finance/business/banking/thirty-years-after-bursting-onto-the-banking-scene-atms-are-slowly-becoming-obsolete/news-story/1b48b9c1910a2be11add9b9415737bde

1 Like

The companies who own the ATMs will be paying for a lease/sublease of the space they occupy.

Fees can easily be avoided as you have found. Coles as well as many other chain retailers offer the same point of sale service allowing money to be withdrawn with a purchase. The advantage with Woollies and Coles is you can duck in and make a withdrawal without any in store purchases. Both the service counter and self serve checkouts dispense cash without purchases…or even a manned checkout if one wants to possibly take more time.

1 Like

How can there be a “generic ATM company” for a non-mobile ATM?
Which registered financial institution fills the ATM with cash (and if deposits are allowed to the machine then which financial institution is obligated to report to Austrac).

Mobile ATMs (the ones on trailers you see at fetes and outdoor markets) vary as to who is responsible for the cash inside them - some of the hire companies say they look after that side of things, other hire companies say the businesses at the market are responsible for loading the machine with cash at the start of the hire.

Interesting that all of the “hire an ATM from us” websites talk about the profit to be made by getting an ATM from them. For example “You make money from every transaction that goes through the machine”

http://www.ifatm.com.au/atm/mobile-event-hire
http://www.atm2go.com.au/event-atms.html
http://www.getanatm.com.au/event-hire.html
http://www.completeatmservices.com.au/mobile-atm-hire-for-events.html
http://www.directatm.com.au/

I would expect that they pay for the right to occupy space, the same as every other lessee in a shopping centre.

Banks have probably looked at the value they get out of renting space for and providing and servicing an ATM, and decided that it is not profitable in cases where the private supplier does find it profitable. This is for one obvious reason: if a bank charges its own customers a fee to use its own ATM the screams will be heard from South East Tasmania to Canberra! That is, a bank will by nature of its business not be able to collect fees from 100% of the ATM transactions, where a private operator can. So the space is worth more to the private operator, thus from the lessor’s position they are a better (more profitable) choice of tenant.

I suspect that shopping complex rents have been going through the roof over the last few years. My local shops (not a complex, more an aggregation) have had all sorts of realignments, with many long-term tenants either closing down entirely (the flower shop), changing ownership (the coffee shop), or moving to a less attractive location (the hairdresser, the takeaway (which was replaced in turn by a Subway)). Speaking to some of the tenants, rents have been rising steadily - but the centre’s amenity does not seem to have risen with them, it is all being taken as profit.

So Australian commercial leases, already some of the most expensive in the world [Citation forgotten] and part of the reason Gerry A. Harvey doesn’t want to compete with an international market, are becoming even more expensive.

*The ‘A’ is for Atrick - his father was allegedly a passionate fan of cricket who was in Johannesburg and watched Tom Goddard take his famous hat trick, while his mother really wanted him to be named for her great-aunt Patrick.

**Yes, there is another explanation for his middle name.

I cannot think of a market-driven way to get the banks back into shopping centres - it is probably something that would have to be legislated. Good luck with that, when we can’t even get a banking royal commission!

In fact, I would suggest that the real area of enquiry in this instance should be into how major supermarket chains can afford to perform banking transactions without even selling anything, while last I heard the corner store has to pay a bank $0.05 - $0.10 per card transaction, whether or not they make a sale!

2 Likes

Now we are past the date 1 September 2017, consumers can send complaints to ACCC about any size company making a profit by charging more than actual transaction fees on cards.

Does this apply to using a debit card or credit card in an ATM ?
If the answer is Yes, then it destroys the marketing pitch of “make yourself a profit” used by the companies that sell or hire out non-bank ATMs on permanent or temporary basis.

www.accc.gov.au/media-release/excessive-payment-surcharge-ban

1 Like

No! This is about the supermarket that says “You’re paying with American Express? We have to add $5 onto your bill, because we have to pay them for every transaction”. That is, when you are buying something and get an extra line on the invoice for the payment method.

Interestingly, it also makes the shop work harder to pass these charges on. The shop has the choice of:

  • Directly passing through the exact cost of the bank service, whichever it may be (Mastercard, Visa, Amex, Diner’s etc.); or
  • Charging the lowest cost bank service to all card-using customers.

From the press release:

For example, if a business’s cost of acceptance for Visa Credit is 1.5 per cent, consumers can only be charged a surcharge of 1.5 per cent on payments made using a Visa credit card,” ACCC Deputy Chair Dr Michael Schaper said.

And further:

If businesses want to set a single surcharge across multiple payment methods, the surcharge must be set at the level of the lowest cost method, not an average. For example, if a business’s cost of acceptance for Visa Debit is 1 per cent, for Visa Credit is 1.5 per cent, and for American Express is 2.5 per cent, the single surcharge would be 1 per cent as that is the lowest of all payment methods.

Not many shops actually continue to pass on these expenses explicitly; partly because a shop that doesn’t accept EFTPOS in 2017 is not going to be a shop in 2018. You may find such a surcharge in restaurants, but I’m not sure. I think most merchants have by now worked this cost into their product prices - and refer you to my previous comment, that it is a smaller cost for Colesworth than for the corner shop. This is not fair.

Returning again to your question, regardless of any companies that do continue this antiquated practice, it does not apply to transactions that are solely banking transactions. That means it does not apply to the stand-alone ATM.

2 Likes

Rather amusing how the automation of currency was sold to and by banks and vendors as reducing their cost and risk profile - staffing, theft, handling of physical currency, etc. Now that it is so prolific, the small end user is being asked to pay for the overhead long after that same overhead was transparently integrated into the cost structure … on top of that - banks are shedding responsibility for distribution of physical currency to entities that can profit from it … when we have no choice, we’ll have no choice. What then :slight_smile:

5 Likes

I make very good use of my plastic. It gives me unlimited online transactions, unlimited EFTPOS and unlimited ATM usage as long as it’s my bank’s own ATM machine. I try to avoid any EFTPOS that involves a transaction fee by the place I’m purchasing from. The fee to have this account active is $4 per month. Prior to getting this particular account my monthly transaction fees could blow way over the $10 mark and quite often did. I remember in the 70s and 80s before everyone had plastic and we all used bank books. Don’t remember getting a monthly fee back then. The banks made enough money from the interest that our money generated for them while they held on to it for us, plus they had the interest charges on their loans etc. There might have been a stamp duty or something. It was a long time ago, so I don’t remember all the details. Pretty sure the interest rate paid to the customer for their savings was a lot bigger back then as well. One problem I’ve always noticed with businesses nowadays that are public and have shareholders is that every year they HAVE to make more money than the previous year in order to keep the shareholders happy, and usually that means increasing fees, or adding new fees, or increasing whatever they can get away with. It’s no longer about keeping the customer happy but more about keeping the shareholders happy.

3 Likes

Bitcoin. Litecoin. Etherium.

The more important question might be what happens when currencies are no longer issued and controlled by states. When they can no longer be used to control inflation, or to make one country’s outputs more expensive (or cheaper) than another’s. When the currency has a limited supply, such as Bitcoin’s 21 million - and you can’t just print more because you feel like it.

Governments have already given away most of their power to influence an economy. When their fiat currencies are no longer deemed necessary or useful, then who has any control? How do you tax a currency that by design is secret, and whose movements are published by everyone but mean nothing to anyone?

The future of money is exciting… and terrifying.

1 Like

This is how modern economics works, @NubglummerySnr . Basic economic theory starts with ‘assume that the market is infinite’, and builds from there. We are now in a period when companies cannot rely upon new efficiencies to grow profits, as we had in most of the twentieth century. They need to look elsewhere, which means one of three things:

Increasing market share at the expense of competitors (this often involves buying the competitor)
Increasing prices where you are a monopoly or where the market is relatively inelastic (i.e. your customers are unlikely to move elsewhere because it’s too much trouble). This is something that banks can do - changing banks is a load of trouble
Cutting costs. This is another form of ‘efficiency’, but generally involves saying ‘we don’t actually need to perform that particular function in our business, so let’s stop doing it and if necessary outsource it to someone who has a weaker union’.

So we spend a decade or two or three with poorer products (from cost-cutting), higher prices, and fewer suppliers growing larger and larger (Colesworth, Amazon). What happens when you have wrung all of the blood out of your stone, and can no longer deliver ever-growing dividends and/or share prices?

Ultimately, capitalism must fail, because it requires infinite growth in a finite economy. As it goes through its death throes, though, everyone will be hurt. It is just not clear when the pain will get to a point where we can say “capitalism is causing this” and start looking for solutions, but I’ll give you an example.

Consider the US as being ‘ahead’ of the rest of the world in following the capitalism path. Over the last thirty years, US wages have stagnated because of the need to draw profits from an ever-drier stone. Now look at what Australian wages have been doing over the last three to five years. The one percent are still gaining year on year, but everyone else is going backwards, comparatively. How long can this last, before the Occupy protests return and are violently broken up again? How long can governments keep things ‘running smoothly’ when Joe Average just has to look at his own work hours - or the beggars he now sees in the streets - or the government offers to coal billionaires like Gautam Adani - to know differently? How many times can we keep doing the same thing, and continue to expect a different outcome?

I think I may have strayed just slightly off topic.

4 Likes

Far from proven solutions for a national let alone global economy … with interesting side effects as you noted. Still not convinced we’ll have a choice, or at least a viable choice.

The future seems neither exciting nor terrifying to me - more just a gathering gloom of weltschmertz …

I had to have a giggle at someone a while back who invested in gold because it was ‘secure’ and ‘real’ and apparently only subject to the fluctuation of (funnily enough) the price of gold. No, they didn’t have ingots under the bed - they had paper gold - the kind issued by some investment house to say you have bought some real gold that exists somewhere but you’ll never actually get to see it. I don’t know why, but my cynicism meter was bouncing off the pin …

One thing is for certain, the future will be ‘interesting’ …

1 Like

Which reminds me of something. From 1934 to 1977 it was illegal for a citizen of the United States to own gold bullion without a special licence.

Weird, communist country.

1 Like

Its typically a flat 25c fee or thereabouts for an Eftpos transaction/withdrawal. I’d say they’re just happy to get you into the store and just eat the cost (ultimately its passed on through grocery prices).

2 Likes

Shopping centres are their own masters, I would say. I think if customers complain, banks will respond by increasing the number of ATM’s outside of the centres. Then the shops in the shopping centres might complain that they are losing business. The shopping centres might like to think again. Nothing gets done if you don’t complain!

Don’t be too down on the Shareholders. You are right of course that shareholders do expect a return on their investment and if that is bigger every year then smiles all round. Of course the customers are paying for it with fees, mortgages, loans etc.

And who are these shareholders? Well for most Australians it is the superfunds! Yup almost everyone with a superfund will be a shareholder in the banks. And if you have a super account you can’t convince me that you would be happy to make a loss next year to offset the fees and charges you don’t want to pay. And IMHO bank fees and charges are some of the easiest to avoid by understanding the rules of the account you hold.(Win win for you that way, collect the profits in your superfund and avoid the fees and charges).
Play by the rules and no fees and charges. If the rules don’t suit, then shop around for a banking institution that has better ‘rules’ for you. And those red ATM’s look on them closely, some are actually linked to the banks and you wouldn’t be charged e.g. Redi-teller is linked to NAB.

1 Like

Firstly, I want to mention the reason I poked my nose in here again. @NubglummerySnr, is it possible to change the title of this discussion thread? I only just noticed it, and now those automatic teller machine machines are making my brain hurt :dizzy_face:.

And now, on with the show.

This is true to a point, Karen, but this redistribution affects different people in different ways. Those who are wealthy have more superannuation and investments, and get better returns from their larger shares of the banks. The less wealthy have less or no superannuation, and so much poorer returns. Worse than this, who are the people who need to use these ‘pay for your money’ machines? I would expect that largely this will be the poorest - those who cannot draw out all the money they need over the next week at once, and those who cannot get a decent deal with their bank to waive certain fees and charges. (There are actually quite a few reasons that the poor pay more for their banking, but I won’t go into them all here.)

As a shareholder, I am not particularly happy at earning my retirement savings from those in our society who are worst off - and yes, our banks know who pays their fees.

Wages in Australia are starting to follow the US example and stagnate - but investments continue to boom. Our society already has obvious and growing inequality: the current trend is making things much worse. So as shareholders, maybe those of us who can speak up need to speak more loudly for the other ‘factors of production’ and accept that we should not be the sole beneficiaries from our investments?

There is a lengthy essay, or a book, buried in this brief discussion of ‘who does benefit, and who should benefit’ - and what the current imbalance will lead to.

3 Likes

Agree with this

At the end of the day, much as if you’re a supermarket, fruit barn, hairdresser or similiar, shopping centre lease agreements can provide for protection against further letting in your category/niche.

So, say if you’re a hairdresser in a minor shopping centre, you might want this built-in for peace of mind, lest a competitor approach the shopping centre operator to open up in a vacant space within the same centre. Not sure how common the practice still is.

1 Like

I have not paid a lot of attention to the privately owned generic ATM’s excepting they used to advertise themselves on their screens. Today the one I normally walk by had advertisements for the shops in the arcade.