ATMs, Convenience, Choice, and Situational Monopolies
Where did we obtain the idea that we are entitled to no-charge ATM services? ATM hardware is expensive, and so is replenishing the machines. Banks usually provide ATM services for their own customers at no charge, as a way of attracting and retaining customers, but why do we think they should provide these services at no charge to everyone else?
But try to tell that to the Washington Post , which laments(reg req'd):
As I said earlier,
But try to tell that to the Washington Post , which laments(reg req'd):
Chevy Chase Bank blankets the region with ATMs and charges non-customers up to $2.25 to use them. In many places, there is no other choice.As I wrote last week, people's use of an ATM from another bank or using an independent for-profit ATM service is a convenience. But we do have choices:
- We can pay for most purchases with our debit or credit cards
- We can walk or drive a few extra blocks to a place with lower ATM fees.
- We can plan ahead and get more cash when we are at our own bank or at a no- or low-fee ATM.
As I said earlier,
For repeat purchases, like candy, pop, and ATM usage, if one outlet rips me off in the situational monopoly, I don't use them again unless it is to my benefit to use them. And sometimes it is — e.g. when I'd rather pay an extra 50 cents than walk or drive an additional block or two.
... In our town we have options: we can use an ATM at a bank and pay nothing extra, or we can use an ATM at a convenience store and pay a bit extra. This seems ideal to me. We get the extra choice, but we don't have to pay more if we're willing to go to our bank.
Category: Economics Posted on
Tuesday, September 12, 2006 at 8:56am
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I remember something called the TYME network (Take Your Money Everywhere) in Madison, in which a number of banks offered these electronic cash points. The advantage was in not having to wait in line at a bank or to fill in checks. No service charges, no machines tied to a single bank.
All changed. The TYME network now has reciprocal switching with Cirrus in Illinois, but the host bank now has a roaming charge if your debit card tied to another bank. Much of the griping is about the introduction of fees where previously there weren't, which is contrary to the general evolution of electronics to better services at lower real prices.
A couple of years ago my banks ATM was out of order. I had to use the Bank of America ATM across the street and it cost me $3.75 in fees. My bank knew their ATM was down and reimbursed the charges, but I had to ask for it. Ultimately there is a bit of indignation generated by the idea of having to ransom your own money that this organization is supposed to be safeguarding.