It is still too early to talk about an epochal turning point, but certainly the feared one update of the commission system on the ATM for ATM withdrawals it will leave its mark. It is in fact a change in the costs of withdrawals and payments that have been in place for years. The load of novelties will be complete, in the sense that they will involve ATMs, automatic machines that distribute cash, POS and card readers used by shops to pay without cash.
In the meantime, the problem of fewer and fewer ATMs available with more and more closures and difficulties for customers to recover cash.
Returning to the reform, it will therefore concern all the mechanisms that regulate the functioning of the entire network. At stake is the Bancomat company, owned by 122 Italian banks, or a part of the over 400 that then use its services. It manages around 2.5 billion payment and withdrawal transactions every year for over 160 billion euros and 34 million cards.
So let’s go deeper in this article:
ATM commission system, what may change from 2023 Changes in withdrawal and payment costs change or not More and more ATMs closed, what to do?
ATM commission system, what can change from 2023
This is not a bolt from the blue as the banks and the company that manages the most widespread payment and withdrawal circuit in Italy have been working in this direction for some time. To understand the impact of this change, however, we need to take a step back. In fact, the current system provides for a double level of commissions. In the first place there is the fixed cost of 49 cents i.e. the so-called interchange fee.
Then there is il cost charged to the customer by the credit institution who issued the card and which can go up to 3 euros. The figure is linked to the agreements signed by the consumer at the time of signing the current account contract. In essence, it is a variable figure. Cash withdrawals, on the other hand, are generally free of charge from one’s own bank counter, while a commission is charged from competitors’ ATMs.
The new ATM system to start in 2023 it would wipe out the inter-bank commission, leaving it up to the person offering the withdrawal service to establish the final cost, which cannot exceed a ceiling of 1.5 euros. So goodbye to the interbank commission and the variable one, charged by ATMs to institutions for each cash withdrawal. With respect to this project, will there be repercussions on the costs of withdrawals and payments? Second ATM no.
Numbers in hand, every year of the approx 500 million cash withdrawals in Italy with an average amount of 220 euros, only a quarter, or about 120 million, will have an impact from the new mechanism. The others continue to withdraw the banknotes from their bank branches, i.e. without costs. And who has an online bank, without a physical network of ATMs? It could pay more but it will depend on the agreements signed by individual institutions.
Withdrawals and payments costs change or not
Hence, as argued by Alessandro Zollo, CEO of Bancomat, the interchange fee of 49 cents, as it is structured today, would make the cost of the service is unaffordable so much so that the number of ATMs is constantly decreasing and as this continues there will be fewer and fewer. According to him, ATMs are machines that must always be updated to new technologies to guarantee high levels of safety.
This has costs and the remuneration model on who makes investments currently is not enough. Also because, he points out, in addition to maintenance and software, there are also the costs of security, logistics and insurance for moving cash. Hence the drafting of a project for a new remuneration model for circular withdrawal operations.
What to do to deal with the increasingly frequent closure of ATMs
As anticipated at the beginning of the article, one of the problems that is increasingly “in vogue” is that of the closure of ATMs where you can withdraw (but not only) with obvious problems and inefficiencies for many customers.
By now, the closure of ATMs is an established trend in continuous growth and it will not be easy to go back, mainly motivated by the rationalization of the costs of the various branches but also by the fight against cash.
At this point it becomes important to know alternative systems to branches (ie where you can, in any case, withdraw money with an ATM) or how to find the ATM closest to your location, especially when you are not close to home. (we have seen both themes in 2 dedicated articles that you can find in the links just above)