Automatic Teller Machines (ATM’s) in Australia   In 1980 the Bank of NSW (now Westpac) introduced the country’s first ATMs which allowed customers to deposit, withdraw and transfer their funds “electronically” between accounts through the machine.   ATMs are placed near or inside the premises of banks, also in locations such as shopping centres or arcades, airports, grocery stores, petrol stations, restaurants, or any place large numbers of people may gather.   In Australia ATMs are connected to interbank networks, enabling people to withdraw and deposit money from machines not belonging to the bank where they have their account or in the country where their accounts are held (enabling cash withdrawals in local currency). Using interbank networks will attract a fee from the company owning the ATM.   Reforming the Australian ATM system Important reforms to Australia’s ATM system came into effect in March 2009, it is hoped that these reforms, implemented by the banking industry and supported by the Reserve Bank, will result in increased competition and efficiency in the Australian ATM system.   The most immediately change is direct charges at ATMs. When a cardholder makes a withdrawal or enquiry at an ATM not owned by their bank or financial institution, the ATMs owner will charge the cardholder a fee. The fee must be displayed clearly on the ATM screen before the transaction is completed giving the cardholder the opportunity to cancel the transaction if he or she does not wish to pay the fee, by shopping around cardholders will be able to use the ATM with the lowest fee.   Direct charges are not levied at ATMs owned by the cardholder’s own bank or financial institution. Also, some financial institutions have arrangements that will allow their customers to make fee-free withdrawals from ATMs that they do not own.   Previously an interchange fee was paid by a cardholder’s bank to the ATM owner whenever a foreign ATM transaction was undertaken. The cardholder’s bank would then pass this fee on to the cardholder with an additional fee (foreign ATM fee). The cardholder did not know how much this amount was until they received their monthly statement from their financial. With the elimination of the interchange fee, there is no longer a case for financial institutions to charge ‘foreign’ fees when their cardholders use an ATM owned by another institution. This change to cardholders paying the ATM owner, rather than their own financial institution, has improved the transparency of fees and will improve competition within the system.   Reasons for the Reforms The Reserve Bank was concerned that interchange fees were not transparent and had no or little relationship to the actual cost of a foreign ATM transaction. This resulted in little or no competion with interchange fees, which ultimately flowed through to the fees paid by cardholders. This inflexibility may have resulted in the number of ATMs in Australia declining as owners of ATMs found it unprofitable to deploy ATMs, particularly in high-cost and low-volume locations.   Direct charging allows ATM owners to directly compete for business with one another by offering lower charges than other ATMs in the vicinity. This introduces competition which has been missing from the Australian ATM system to date. Overall these changes could be expected to offer cardholders a more competitive ATM system, with access to more ATMs. Ever wished you owned your own ATM?   Now you can, another aim of the reforms is to make it easier for new players to become part of the system and compete with existing ATM providers. The removal of interchange fees helps to achieve this because the need to negotiate an interchange fee with each of the existing major players in the ATM system acted as a barrier to entry. The Reserve Bank is also requiring that the costs charged to new entrants are capped to prevent existing ATM owners from restricting the entry of competitors.   Companies such as Own Your Own Atm, are well placed to assist in purchasing ATMs and organizing joint venture partners within the ATM industry to manage your machines. There are currently many prime locations throughout Australia, with very old ATM machines which require replacement as well as new, never before available sites.   Information Supplied by Corr Piccone Own Your Own Atm Pty Ltd Email: sales@ownyourownatm.com.au