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ATM Surcharges Hit Their Highest Rate Ever This Year, Here’s Why:

By PaymentsJournal
February 13, 2019
in ATM, Debit, Truth In Data
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ATM usage remains an important part of the banking experience even as consumers increasingly embrace online banking, mobile apps, digital payments, and other alternatives to cash. The 2018 U.S. ATM Benchmark Report from Mercator Advisory Group shows that consumers who use digital banking channels continue to rely heavily on ATMs for convenient access to cash and other essential banking services.

At the same time, rising ATM surcharges and growing demand for surcharge-free ATM access are creating challenges for financial institutions and ATM operators. Consumers increasingly consider access to fee-free machines when choosing a bank, while ATM owners continue to depend on surcharge revenue to offset deployment and maintenance costs. These competing pressures could significantly influence future ATM strategies.

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Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – 2018 U.S. ATM Benchmark Report

  • ATM surcharges broke $3 on average out-of-network transaction this year, their highest level ever
  • But consumers value surcharge-free ATM highly, 65% of consumers cite its importance when choosing a bank
  • 72% of consumers who use digital channels like online and mobile also use ATMs
  • 20% of consumers regard the ATM as the primary point of communication with their bank
  • Yet ATM owners are dependent on surcharge fees to pay for ATM deployment and maintenance
  • As more consumers go surcharge-free, fewer surcharges are collected, thus requiring higher fees to maintain the business

About this report

Consumer use of ATMs to get cash, make deposits, and check balances remains strong despite the decline in check writing and new products like apps for digital person-to-person (P2P) payments, payment cards, and mobile wallets that aim to reduce the need for cash. A new research report from Mercator Advisory Group titled 2018 U.S. ATM Benchmark Report explores bank ATM placements in comparison to branch locations, current fraud trends, the launch of various cardless cash access technologies to provide cardless cash access at the ATM, and consumer attitudes toward ATM use.

“We see continued strong use of ATMs by many consumer market segments, including consumers who are also frequent users of online and mobile banking. Given predictions that cash use will begin to decline and in light of the precipitous drop in check use, making long-term investments in ATMs becomes more complex,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Serviceat Mercator Advisory Group and author of the report.

 

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