All of us have at one point used an ATM to withdraw cash. Have you ever considered the intricate complexity this simple and straightforward action entails? Probably not, but surely you question why a transaction at a Euronet ATM may incur fees for the user.
Why are ATM fees vital?
Making cash available comes with significant investments and operating costs, such as the rental of a suitable location, installing and operating the ATM, filling the device with cash, performing security controls and upgrade measures that deliver a reliable service 24/7, and operating customer service lines. ATM fees are important to sustain the operation of an ATM network and make cash available to all when and where it is needed.
Can ATM transactions be free?
Running a reliable and efficient cash business is not free but the convenience it offers is priceless. The prevailing expectation still is that the customer should have free access to their own money, anytime, anywhere. Having access to an ATM whenever you need it is a service that comes at a price.
It is the “Price for Convenience”. We are willing to pay for a service that addresses and solves a specific issue or situation that we find ourselves in. Such a service, however, should come with options and respect the customer by providing ample information to form an educated choice.
Understanding ATM fees
Let’s discuss the different types of fees that may apply to a cash transaction. These types may exist in any ATM, whether operated by an Independent ATM provider or a Bank.
- ATM Access Fee – A fee for the provision of the cash withdrawal service
ATM Access Fee is a flat fee applied on each withdrawal transaction charged by the ATM provider for the ATM cash service itself. The fee is meant to cover the “cost of providing the cash service”. It Is not related to any fees that the customer Bank may apply to the cardholder for using a third-party ATM. In the spirit of transparency, the ATM provider notifies the customer for this fee and gives the possibility to cancel the transaction if the customer so desires.
ATM Access Fee helps sustain ATM networks and enable access to cash even in remote areas. It helps deploy a ‘balanced” network of ATMs across the country. It is a “fair fee” as it is defined by the entity (ATM operator) providing the service (ATM cash withdrawal) and paid directly by the customer. It establishes a direct relationship between the two and is not a hidden fee applied by a third party (eg the customer bank applying a penalty fee to their customer using a non-bank ATM).
- DCC – a fee for the provision of currency conversion services
Currency conversion is only applicable to International Cardholders and only when the withdrawal currency is different from the customer’s home currency i.e. in the case of a USD-denominated card to withdraw EUR. A Dynamic Currency Conversion (DCC) is the “live” offer of an exchange rate to the customer at the moment of the ATM transaction.
This is an optional service as the ATM operator offers the cardholder the possibility to (a) select the entity that performs the necessary currency conversion i.e. either the ATM operator or the customer ‘s Bank or (b) cancel the transaction at no-cost.
The conversion rate used for the conversion may differ from the official conversion rate published daily by the European Central Bank (ECB) and this difference is referred to as Conversion Fee or Conversion Markup. The entity (ATM operator or customer Bank) performing the conversion needs to explicitly indicate the Conversion Fee as a % over the ECB rate at the day transaction.
This transparency rule is imposed by regulators (such as the EU) but also required by International Card Organizations (eg VISA, MasterCard) to support the customer for better decision making. These are strict compliance conditions and make the comparison between the two options much easier for the consumer.
Are Euronet ATMs expensive?
Euronet fees are fair and correspond to the current economic conditions. Lower fees would mean fewer ATMs, which would compromise cash access for the community.
Euronet ATMs are competitive. The consumer can always compare the fees applied by other ATM operators and Banks and evaluate whether the ATM fees are expensive or not. The practice of displaying all fees in a transparent way on a Euronet ATM facilitates this comparison. Euronet grants the customer the opportunity to make an informed decision and either select Euronet’s conversion service for the instant transparency it provides or select that the Bank performs the required currency conversion or opt out of the transaction at any time without any cost.
