Aussies waste $670m using the wrong ATMs

Aussies waste $670m using the wrong ATMs

Consumers who use ATMs not owned by their own bank paid almost $670 million in mostly unnecessary fees last year, research shows.

The fees, known as foreign ATM fees, are those charged by the ATM operator when a consumer uses a machine serviced by a bank other than their own institution, or not in a network agreement with their bank. The fees are $2 on average per transaction.

RateCity found that despite the charges, the number of transactions made at foreign ATMs was increasing with consumers spending around $10 million more in 2012 compared to 2011 and $30 million more than in 2010.

Michelle Hutchison, spokeswoman for RateCity, said that for most Australians the foreign ATM fee is largely avoidable.

“We do need to take some responsibility for avoiding these fees. There’s simply no excuse in the major cities for using a foreign ATM. For example, downtown Sydney has over 1000 ATMs, representing most networks and institutions,” she said.

Hutchison said for people in some locations – such as outer suburbs and smaller regional centres – there might be minimal ATM access and no major supermarkets or cash-out Eftpos outlets.

She said the best ways to avoid these fees is planning and to avoid making lots of small transactions.

Legislative changes introduced in 2009 meant ATM customers had to be notified of the foreign ATM fee on the machine’s screen before the transaction was completed, and as a result the number of transactions at foreign ATMs plummeted.

“Legislation introduced to warn customers about fees at the ATM deterred us for a while, but convenience has outweighed cost and we’re getting back to our old ways and increasingly using foreign ATMs,” she said. 

“Currently, four in every 10 ATM transactions is made at a machine not owned by our bank’s network and as a result we wasted more than $53 million in January.”

So how can we keep driving these costs down?

The big contributor will likely be ongoing Eftpos growth, she said. Almost 335 million transactions occurred via foreign ATMs in 2012.

“If just 10 percent of these switched to using cash out via Eftpos, we’d spend around $67 million less per year on ATM fees.”

A large chunk of this money could be kept by consumers with more careful planning and budgeting, she said. Many financial institutions now offer free ATM locator applications for smartphones, while others offer free transactions with the major banks’ ATM networks. To find out more visit RateCity and compare transaction accounts or ask your provider about how to reduce ATM fees.

 “Let’s be clear $670 million is too much for Australians to be paying just to get cash we already own.”

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Learn more about bank accounts

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The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

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You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

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Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.

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If you’re under 18 and you want to open an Australian bank account, you will need your passport or birth certificate. (Some lenders might require just a Medicare card or driver’s licence.) You can apply online or at a branch. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

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