Australia’s major banks have all announced they will remove fees for ATM cash withdrawals for customers from other banks. CBA was the first to announce the removal of ATM fees, with the other major banks and others quickly following suit.
Although the Big Four banks having the largest ATM networks in the country, research by consumer group Choice estimated these foreign ATM fees collectively amounted to $500 million in revenue every year.
However, it is important to note that this is an area where revenue will continue to decline. Data from the RBA shows that ATM transactions have declined from 67.6 million in July 2012 to 51.9 million in July 2017.
Furthermore, the number of ATM transactions customers made at other financial institutions have dropped from 27.5 million in July 2012 to 21.9 million in July 2017.
This is explained by the increase in cashless spending. Data from RFi Group’s Annual Payments Diary shows that the proportion of customers who have used a contactless card has increased from 57 per cent in 2014 to 74 per cent in 2017.
Furthermore, the frequency of contactless spending has also increased, with 65 per cent of contactless card users now making contactless purchases daily or at least a few times a week.
If a similar trend is to continue in mobile payments usage, it would only further exemplify the growth of cashless spending and the decline of ATM withdrawals.