ATM ‘disloyalty’ fee wins customer buy-in
An ATM ‘disloyalty’ fee imposed on ATM usage in Australia has seen customer loyalty at National Australia Bank (NAB) increase by 10% since it was introduced.
The bank says it is seeing more of its customers transact on NAB ATMs than on other banks’ machines than it had in the past. It added that there seemed to be a similar trend at other banks.
The Reserve Bank of Australia introduced the new ATM direct charge in March 3 after cancelling the interchange fees paid between banks when customers use each others’ domestic ATMs within Australia – in a bid to increase transparency on foreign ATM fees.
ATM owner can now charge customers directly to use a machine, but only if they disclose the fee before the transaction.
BankWest, Commonwealth Bank (CBA), ANZ Banking Group and Westpac now charge customers of other institutions A$2 for the use of their ATMs, which comprise the biggest networks in Australia.
NAB’s direct charge for non-NAB customers is A$1.50 for a cash withdrawal or advance, and 50 cents for a balance enquiry at one of its 1,650 ATMs.
But NAB and CBA subsidiary BankWest were the only major banking institutions to retain a 50 cent disloyalty fee for customers using ATMs owned by other banks (`foreign ATMs’).
This is in addition to the fee directly charged by the ATM’s owner.
A customer backlash in early March forced Westpac, St George Bank and ANZ Banking Group to drop their planned disloyalty fee, and move in line with CBA.
NAB plans to add 100 new ATMs to its current 1,650 network in the next three months.
CBA has the largest ATM network in Australia with over 4,000 machines. Westpac and St George have 2,800 ATMs in their combined network while ANZ has 2,500.