cba to roll back atm fees

http://business.smh.com.au/business/cba-joins-citibank-in-rolling-back-atm-fees-20090222-8ed6.html

CBA joins Citibank in rolling back ATM fees
February 22, 2009 - 7:13AM

Commonwealth Bank of Australia says it will roll back its fees for customers using other banks' ATMs, dubbed 'foreign ATMS'.

The Reserve Bank of Australia will allow direct charge fee reforms from March 3.

CBA also says it will add another 700 BankWest ATM machines to its network from its acquisition of BankWest last year.

CBA retail banking boss Ross McEwan said CBA customers would now have access to more than 4,000 ATMs, the largest ATM network in Australia.

The move by Australia's second biggest bank follows Citibank's announcement on Friday that it will not charge its own customers foreign ATM fees.

Citibank will partner with Westpac to allow its customers access to 1,700 fee-free Westpac-branded ATMs across the country, the bank says.

The announcements follow recent criticism of National Australia Bank's decision to charge its customers a 50 cent fee when they use another bank's ATM. This in addition to the fee directly charged by the ATM's owner under the RBA's reforms.

Consumer group Choice said if other banks followed suite, consumers would lose $200 million a year from extra fees.

National Australia Bank, Westpac, ANZ Bank and St George Bank have already announced they will continue to charge foreign ATM fees.

The RBA reforms will eliminate fees paid between banks when customers use each others' ATMs - known as the interchange fee.

RBA governor Glenn Stevens told the House of Representatives Standing Committee on Economics on Friday that the interchange fee was not transparent and were not clearly related to costs.

''Fees paid by customers using ATMs other than those owned by their own banks - so called foreign fees - are not always properly disclosed (and in many cases are higher than necessary),'' he said.

Under the new regime, an ATM owner would be able to charge the customer directly for the use of the machine but must disclose the fee prior to the transaction, Mr Stevens said.

''Use of another bank's ATMs will presumably attract a fee by that other bank to cover the costs.

''But the only cost to a cardholder's bank associated with use of a foreign ATM is the cost of processing the transaction electronically - a matter of no more than 10 cents.''

The Australian Bankers' Association said the range of costs to banks was wider than that acknowledged by the RBA governor.

AAP