Westpac Group will increase its fee-free ATM network to nearly 7000 locations, in a move that some say is designed to appease customers affected by branch closures.

The ATM expansion comes as cash use in Australia has plummeted.

Armaguard will provide Westpac, St.George, BankSA and Bank of Melbourne personal and business customers with fee-free ATM withdrawals at more than 1700 Armaguard ATMs nationwide, Westpac announced. 

More than 500 are in regional, rural and remote locations.

The latest agreement brings Westpac Group’s fee-free network to about 7000 ATMs Australia-wide. 

Westpac’s own ATMs don’t typically charge fees, but Armaguard’s atmx usually charge for cash withdrawals, starting from about $2 per transaction.

Given banks have been reducing their ATM footprints in recent years, leaving customers with less choice for withdrawals, the Westpac Group deal is a significant win for customers, Swinburne University of Technology Adjunct Professor Steve Worthington said.

ATM market shifts from banks

Since 2016, about 8000 ATMs (equivalent to 25 per cent of the market) have closed in Australia, a Reserve Bank of Australia report found.

Most of these closures were ATMs owned by authorised deposit-taking institutions such as banks and credit unions, while independently owned ATMs (such as those owned by Armaguard) gained a larger share of the ATM market.

“The major banks have been closing branches … and then taking ATM machines out as well,” Professor Worthington said.

“[Companies] like Armaguard have stepped into that gap, and their ATMs are located in bars, nightclubs … various convenience stores.

“So this is good news, that [people are] no longer are paying a fee to access their own money … it has been quite a concerning thing – to pay a fee to access your money is really kind of cheeky, to say the least.”

Bank closures add to burden

Australians, particularly those in regional and remote areas, have been hit by hundreds of bank branch closures over the past few years.

These often take away ATMs, Professor Worthington said.

Despite Westpac pausing eight branch closures while a Senate inquiry into the effect of regional bank closures takes place, the Finance Sector Union said the bank had plans to close or co-locate another 42 branches across metropolitan and regional Australia between February and June.

Professor Worthington said the expansion of Westpac Group’s fee-free ATM network is likely an effort to ease the blow of its branch closures.

“I would suggest that they don’t want to be accused of denying people access to cash because they’re withdrawing their branches and their ATMs,” he said.

The RBA report found ATM cash withdrawals have been declining since 2008, with the number of withdrawals falling by about 60 per cent and the value of ATM withdrawals dropping by 40 per cent.

This could be due to a number of factors, including the ability to get cash from retailers, and the increasing popularity of digital payments; a report by financial technology company FIS found cash represented just 6 per cent of Australia’s point of sale market share in 2022.

But Australians are still fond of having cash at hand, with the RBA noting a decreased return of bank notes as people took to hoarding cash last year.

Although the expansion of Westpac Group’s fee-free ATM network is good news and PR, Professor Worthington said it still doesn’t change the bigger picture of the major banks decreasing branch and ATM numbers across the country.

These closures, or shorter opening hours, create problems for people who won’t – or can’t – adapt to a more digital climate, such as the elderly or people with carers who don’t want to hand over their bank cards.