Using ATMs allows customers to withdraw cash and perform other banking services without interacting with a teller or branch representative. Users may need to pay fees to access services via ATMs.

ATM owners may charge fees when customers use their machines. Banks may charge fees when their account holders use out-of-network ATMs. Users may also pay currency conversion or exchange fees when using international ATMs.

Types of ATM Fees

ATMs are owned/operated by various entities, and most ATMs operate through a wide network. An ATM card used at one networked machine can typically be used at all other machines.

Issuing banks aim to attract and retain customers by offering free ATM services. Non-bank owners are usually businesses or individual investors who see ATMs as a source of passive income.

Fees are often a factor because users might prefer using a nearby non-network ATM over a distant networked one.

Operator Fees

ATM owners charge operator fees, also known as surcharges, to users from outside their network.

Most ATMs are owned by banks and other financial institutions. Banks deploy ATMs in lobbies, outside branch buildings, at self-service kiosks near branches, and at drive-up locations where automated withdrawals are available. Banks may also place ATMs in malls, shopping centers, and other public places, such as transit hubs.

Independent owners and individual investors operate many (but not all) ATMs in stores, gas stations, restaurants, and other locations away from bank branches.

A wide network connects many ATMs to facilitate surcharge-free transactions. For example, users with Visa credit, debit, and ATM cards can use Plus Alliance ATMs for free, and users with Mastercard credit, debit, and ATM cards can use Cirrus ATMs for free.

Allpoint and MoneyPass networks connect participating financial institution cards to ATMs at banks and other locations (including pharmacies and gas stations).

There are hundreds of interbank ATM networks operating worldwide. Independent ATM owners can attract more users (and more store traffic if the ATM is near a point of sale) by joining one or more interbank networks. Networks typically pay ATM owners a portion of the interchange fees they earn.

However, not all ATM owners participate in all networks. Many banks and independent owners use surcharges as a source of income.

If ATMs are scarce in their area, private ATM owners may have no incentive to join one or more card networks because they must pay for ATM space, or their ATM generates in-store traffic or sales. Users should know where to use their ATM cards without incurring operator fees.

Out-of-Network Fees

Many issuing banks operate extensive ATM networks and may charge out-of-network fees when cardholders use non-bank ATMs.

Some issuing banks waive out-of-network fees by participating in interbank networks. Other banks offer unlimited out-of-network fee reimbursements or a maximum reimbursement amount or percentage. Some banks may offer out-of-network fee reimbursement as a benefit for specific groups, such as veterans or seniors.

International Transaction Fees

Most U.S. issuing banks charge international transaction fees to cover various costs. Fees vary by bank and transaction situation.

International transaction fees cover costs for using out-of-network ATMs, currency conversion and exchange rate markups, operational expenses, and other costs.

Banks may charge a certain percentage of the transaction amount, a specific dollar amount, or a combination of both.

Factors Affecting ATM Fees

ATM fees are part of the financial transaction market. Business and marketing decisions determine when and where ATM owners and issuing banks charge fees and how much.

The decline in cash usage and the widespread distribution of interbank networks may lead to some ATM owners and issuing banks charging higher fees to payees.

Location

Geography can affect the amount of ATM fees in several ways.

Issuing banks may sign interbank network agreements to reward or incentivize consumers in certain areas. For example, banks that are more common in a particular area may reimburse operator fees and defer out-of-network fees because customers are more likely to use non-bank ATMs.

How to Limit Unnecessary Charges When Using ATMs

When using ATMs, knowledge is power. ATM owners and issuing institutions invest in ATMs to provide a valuable public service. However, the dynamic nature of the financial services industry leads to frequent changes in fees associated with ATM use.

ATMs can serve as profit centers, marketing tools, and drivers of customer acquisition and retention.

Even in an era of declining cash usage, consumers have a responsibility to understand how ATM fees affect their financial flexibility. For frequent cash users who want to minimize ATM fees, knowing the bank’s fee policy and offerings and how they compare to competitors is crucial.