Half the nation is “wasting” hundreds of millions of dollars on ATM withdrawal fees, according to new research by finder.com.au.
The financial comparison website surveyed 2031 people and found that 50.2 per cent admitted to regularly withdrawing cash at ‘foreign’ ATMs — cash machines not owned by their bank.
Of these, 1.5 per cent said they used another bank’s ATM every day, 5.5 per cent said twice a week, 13.4 per cent said once a week, 7.9 per cent said once a fortnight, and 21.9 per cent said once a month.
If these percentages hold true for the whole population, and a $2 fee is assumed, then Australians are wasting $65.6 million a month and a total of $787.8 million a year in ATM fees, finder.com.au calculated.
Bessie Hassan, money expert at finder.com.au, told The New Daily that Australians needed to change their withdrawing habits, saying the convenience offered by ATMs was not worth the cost.
“ATM withdrawal fees are one banking fee you should never pay,” she said.
“Unsuspecting customers are being stung by as much as $2.50 to use an independent ATM.”
The Reserve Bank reported that 39 per cent of all ATM withdrawals in December 2016 were from ‘foreign’ machines, which works out to about $47 billion worth of withdrawals every year.
Using these figures, and assuming a $2 fee per ‘foreign’ transaction, yields a slightly smaller annual estimate of $518 million in annual fees.
Cash machine fees became more transparent back in 2009 when the law was changed so that banks were forced to charge an upfront fee displayed on the ATM screen, rather than slugging users in their subsequent monthly statement.
Before the change, it was common for banks to bury a $2-per-withdrawal fee in the statement.
According to the Reserve Bank, the law change also made it profitable for ATMs to be placed in previously unprofitable areas, such as festivals and race courses. This could explain why fees are still being regularly paid.
This theory is backed up by the fact that younger people use other bank ATMs far more than older people. Sixty per cent of Baby Boomers surveyed by finder.com.au said they never used a ‘foreign’ ATM compared to just 24 per cent of Generation Y.
Finder.com.au’s Ms Hassan said it “comes down to the convenience factor”.
“When we’re in an unfamiliar location, especially if we’re travelling interstate or overseas, it’s easy to withdraw from the nearest ATM,” she said.
“It also comes down to the ‘pay now, worry later’ mentality. We often rush to withdraw funds as we need them and don’t think about the fee we’re incurring until later when we look at our bank statement.”
Victorian residents and women were the most likely groups to admit to regularly paying ATM fees, finder.com.au found.
Just under a tenth (8.5 per cent) of respondents said they had free access to cash at all ATMs, but the financial comparison website noted that these accounts usually require a regular income to retain the perk.
As the survey suggested, cash is still popular despite the rise of digital payments.
In 2016, the Reserve Bank estimated that ATM use was declining each year in both number and value, but that the overall number of machines had risen by 20 per cent to about 31,600 (higher per capita than South Korea, Canada, France and Russia).
Monthly ATM withdrawals hit a peak in December 2008 at 78.4 million. As of December 2016 they dropped to 54.2 million, but there is still $11.9 billion worth of cash being withdrawn out of ATMs every month.