The Australian Competition and Consumer Commission's final determination on the application by Suncorp and Bendigo and Adelaide Bank to share fee-free ATM resources, published this week, reveals the tensions in the ATM market between independent operators and the banks. One of the industry big operators, Cashcard, opposed the banks' application on the grounds that the proposed arrangements fell outside the networking arrangements allowed for by the Reserve Bank.These tensions are a product of the reform process, whose main purpose was to increase competition in the provision of ATM services by exposing consumers to a transparent pricing system. This change presents a business case to the independents.However, the RBA's direct charging rules also undercut that business case to a degree. In recognition of the competitive advantage that large financial institutions may have over smaller institutions under the direct charging regime the reforms provide for smaller financial institutions to develop arrangements to facilitate access to direct fee free transactions at a wider range of ATMs for their cardholders.The ACCC found that the proposed agreement between Suncorp and Bendigo and Adelaide not to directly charge each others' card holders for ATM transactions would be pro-competitive, providing a public benefit by allowing smaller institutions to develop arrangements that facilitate access to fee-free transactions for their cardholders at a wider range of ATMs. The networks of the two banks add up to almost 1700 ATMs - 998 for Bendigo and Adelaide and 680 for SuncorpThe two banks argued that the breadth of ATM networks is an important element in a financial institution's service and, therefore, in attracting customers for deposit account and retail banking services. Financial institutions with a smaller ATM network are at a competitive disadvantage to financial institutions with a larger ATM footprint. The ACCC accepted this submission.The RBA ATM reform established two exemptions to the rule that no interchange fee be paid between participants in the system. Interchange fees can still be paid by: a participant with a one way arrangement to access one, and only one, other participant's ATMs and the fees is paid in respect of that arrangement; or a participant is a member of an ATM sub-network and the fee is the common interchange fee payable between the members of the sub-network and the fee is paid to another member of the sub-network.Cashcard operates the second largest ATM fleet in Australia, with around 4800 machines. It argued that the proposed arrangement did not appear to be based on the exemptions provided under the reforms to the ATM system. It said the arrangement did not provide for a direct charge or interchange fees between the parties and that the arrangement appeared to be supported by other consideration between the parties.The ACCC said it had no problem with the terms of the proposed arrangement, where the applicants will each absorb their respective costs of implementing the proposed arrangements.