All four of Australia’s big banks bowed to political pressure yesterday and ditched long-hated ATM fees for customers of their rivals, in a move that could save consumers hundreds of millions of dollars a year.
The Commonwealth Bank announced early yesterday that it would drop its $2 a transaction fee for non-customers, citing consumer unhappiness.
It was was quickly followed by ANZ, Westpac and NAB.
The move could shave as much as $500 million a year from bank revenue, given the Reserve Bank estimates Australians make about 250 million withdrawals from banks other than their own each year — although not all of those are from terminals owned by the big four.
West Australians using Bankwest terminals will still be slugged with a fee unless they are customers of the Commonwealth Bank subsidiary.
That puts CBA in stark contrast to Westpac, which said it would also remove foreign-user fees for ATMs at its own regional subsidiaries including St George, Bank of Melbourne and BankSA.
The move comes after political pressure over banking scandals, and as the Productivity Commission examines how much competition really exists in the sector.
It also comes only two weeks before bank bosses face their annual grilling by MPs in Canberra, with fees and charges again likely to be high on the agenda.
ATM fees were a focus at last year’s hearings, when the banks confirmed the cost of providing services to their competitors’ customers was only a fraction of their $2 fee.
The NAB revealed it cost 62¢ extra to service other banks’ customers. It said it cost an average $1.96 per transaction to provide ATM services to its own account holders, who are charged no fees, and $2.58 for non-NAB withdrawals.
The banks’ decision also comes as Australians abandon cash transactions while shopping, in favour of so-called wave-and-go payments using debit and credit cards.
The Reserve Bank said in March ATM withdrawals had hit their lowest mark in 15 years, and NAB figures on cashless retail spending show the value of transactions is still growing quickly.
Treasurer Scott Morrison welcomed the decision but
Opposition Leader Bill Shorten said the decision, while welcome, was no reason to ease off a royal commission into banking.
“Imagine how we could get better banking for all Australians if we had a banking royal commission,” he said.