Floods trigger foreign ATM fee waivers

The rationale for pricing of automatic teller machine fees will be subject to an experiment in flood affected areas of Queensland over the next month as ATM owners agree to waive fees charged to customers that do not bank with the owner of the ATM.

The reason is to maximise access to cash for residents in these areas and to minimise the costs of doing so. Banks say there are no issues with distribution of cash to ATMs and branches, though in some cases ATMs are out of service while the electricity supply is restored.

ATM fees are typically $2 and, under arrangements put in place two years ago, are made clear to ATM users before they commit to a transaction. The fee arrangements reduced use of the "wrong" ATM by about 40 per cent over that time.

The office of the assistant treasurer, Bill Shorten, steered the initiative through in talks with the Australian Bankers Association and retail banks late last week. A dozen or so mutual building societies and credit unions are also waiving fees.

ANZ, Commonwealth, Westpac, Suncorp, Bendigo and Adelaide Bank and Bank of Queensland agreed to waive the fees for four weeks, and then review the policy, Shorten announced on Friday.

National Australia Bank, at least ten credit unions and Heritage Building Society will waive the fees for a shorter period of two weeks and then review the policy.

Customers Limited is the only independent owner of ATMs to waive fees, but will do so only for ATMs carrying the branding of participating banks such as Bank of Queensland.

Cashcard, GRG (which owns some Suncorp-brand ATMs in unaffected areas) and iCash Payments are not waiving any ATM fees.

The costs and profits of operating an ATM network is one issue in recent public debates over banking. The Greens want to scrap ATM fees and have banks pay for ATM operating costs out of other revenue streams.