ANZ's easy slice of the ATM pie

Automatic Teller Machines have become the proverbial pot of gold for banks around Australia. The primary source of this gold is the transaction fee required for using "foreign" ATMs, which the name given to an ATM that is not owned by your bank.

Here's a scary thought. As a nation, we're spending around $45 million every year just through using foreign ATMs, and this figure is rising every year. In 2005, for the first time the number of foreign ATM transactions exceeded the number of people using their own bank's ATMs.
It's easy money for banks, as the cost of processing foreign ATM transactions isn't even close to what Australians are paying in transaction fees.
ANZ is just one bank who have been making a tidy profit on foreign transaction fees, charging their customers $1.25 for a balance enquiry and $1.50 for cash withdrawals from non-ANZ ATMs. Not that much per transaction, but it certainly adds up, and it seems not all customers are aware that their choice of ATM may be costing them more than they think.

ANZ are also capitalising on the customers of other banks and financial institutions by creating a monopoly of ANZ ATMs in high pedestrian areas. This year, for example, ANZ became the provider of the only ATMs available at Flinders Street, Flagstaff, Parliament and Richmond stations in Melbourne.

Excluding rivals by striking exclusive deals such as this has snared the ANZ a lucrative market, particularly as people traversing these stations are likely to be short of time to find an alternative ATM. This is also an issue in regional and rural areas where customers have fewer ATM options to choose from and so may be forced to pay foreign transaction fees.

Banks such as the ANZ may argue that consumers are willing to pay for convenience of using an ATM, so prices rise to keep up with the demand. In an age where very few people are paid cash, ATMs are not a convenience but a necessity for anyone needing access to cash.

So how can you avoid foreign transaction fees? Sometimes it's as simple a walking a block further down the road to find your bank's ATM. If the choice of ATM is limited at a particular location, you may be able to pay EFTPOS for your purchases and take out extra cash, an option offered by many retailers.

With the lucrative profits ANZ is enjoying through foreign transaction fees, that ATM with legs used in several of their recent advertising campaigns is likely to be found jumping for joy down a street near you.

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