Four of five randomly selected major banks reported increased ATM revenues and fees during last year’s fourth quarter compared with a year earlier because they raised surcharge fees, increased the size of their ATM networks, or they did both, PaymentsSource research data show.
“Consumers are more diligent about using their own bank’s ATMs to avoid surcharge fees, so banks charge nonbank customers higher surcharge fees,” says Greg McBride, Bankrate.com senior analyst. “Bank officials always have said their ATM networks’ operating costs would be borne by noncustomers.”
BB&T Corp., for example, reported ATM revenue and fees of $52.8 million, up 5% from $50.3 million, partially by raising surcharge fees to $3 from $2 in 2008. BB&T also increased its ATM network size by 15.8%, to 2,541 machines in 2009 from 2,195 in 2008.
However, raising fees and increasing ATM deployments do not always result in increased revenue. Citizens Financial Group, a Providence, R.I.-based financial institution, raised surcharge fees to $2.50 in 2009 from $2 in 2008. But its fourth quarter ATM revenue declined 7.5%, to $99 million from $107 million, even though its ATM network increased by 35.1%, to 3,554 machines in 2009 from 2,630 the previous year.
U.S. Bancorp’s ATM network shrank 0.3%, to 5,164 machines in last year’s fourth quarter from 5,148 machines a year earlier, but ATM revenue and fees increased 12.2% to $410 million from $366 million. The totals include revenue from its MoneyPass surcharge-free ATM network, in which members pay regular fees, and the bank’s Elan ATM, debit and cash provisioning business, explains a U.S. Bancorp spokesperson.
