ATMs, how commissions will change and why banks are bickering
Here is how the ATM request to the Antitrust proceeds on the new commission system for withdrawals. Here are the details, the objectives of the Bancomat consortium and the positions of the banks
By April we will know the outcome of the investigation opened by the antitrust authority, the Agcm, towards Bancomat, the consortium company that manages the homonymous circuit for withdrawing cash from automatic teller machines (called ATMs in jargon). Bancomat is the leader in the debit card payments market in Italy, with a share of around 80%.
THE CURRENT SITUATION
To date, the possibility of withdrawing money with an ATM card at the counter of a bank other than your own is a service that various institutions offer free of charge. Beyond the charge of the expense to the customer, the bank that issued the card however recognizes a commission, which amounts to 49 euro cents for each withdrawal, to the bank owner.
But the trend – writes Il Sole 24 Ore – is to make the customer pay a sum calculated on the basis of the amount withdrawn.
THE NUMBERS
It is estimated that, currently, withdrawals from ATMs are a total of 500 million per year; for the most part (350 million) they are made by customers of the same bank that owns the ATM, but in the remaining number of cases (150 million) they concern branches other than the bank that issued the card.
HOW THE COMMISSIONS WILL CHANGE
In the event that the antitrust authority should accept the ATM request ( here the more detailed information from Startmag ) , the bank that owns the ATM will decide the cost of the withdrawal operation near the counters of competing institutions.
In any case, the change in commissions on cash withdrawals will not be immediate: on the contrary, it would enter into force after a period of 12-18 months, necessary for the technical adaptation of the banks' IT systems.
WHO ARE THE SHAREHOLDERS OF BANCOMAT
The main shareholders of Bancomat are the banking groups Intesa Sanpaolo (with a stake of 24.2 per cent), UniCredit (18.9 per cent), Banco BPM (7.6 per cent), Monte dei Paschi di Siena (7, 5 percent) and BNL (5 percent).
THE SCAZZI AMONG BANKS
The AGCM-Bancomat development is positively received by the large banking groups, which can count on a capillary network of ATMs throughout Italy; worried, instead, are the online banks (due to their non “physical” nature, in fact) and the local and small-medium sized ones, such as Fineco, which has few branches or concentrated in specific portions of the territory.
Remarkable, in this sense, was the decision of the Dutch group ING (known for the Orange Account), which last April communicated to Italian customers the closure of their ATMs as part of a plan to detach from cash (and related costs ) to focus more on digital channels.
THE BANCOMAT PROPOSAL FOR THE MAXIMUM ROOF
Last July Bancomat submitted to the Agcm a new version of its proposal to modify the withdrawal system which consists in imposing a maximum ceiling of 1.50 euros on the commission applied on withdrawals from ATMs. But this cap (or cap ) could change over time, given that every year it will be examined by Bancomat and the antitrust authority; currently, however, the interchange fee is established every two years.
WHAT THE ATM SAYS
Alessandro Zollo, CEO of Bancomat, told Sole 24 Ore today that "in Italy the number of ATMs is progressively decreasing" and that maintenance and technological updating costs "are increasing".
In justifying the decision to request the antitrust to change the method of remuneration of the withdrawals, he explained that “there is an issue of competitive equity. Today there is an imbalance between the cost incurred by the bank providing the [cash withdrawal] service, which is 90 cents per transaction, and those who use its potential: a burden that is not offset by the interchange fee of 49 cents paid by the cardholder's institution ".
Regarding the possible alignment of the banks on the cap of 1.50 to the commission for the withdrawal of cash, Zollo thinks that “it is not said. According to our calculations, withdrawals will cost less with this system. In other countries, the average price with the remuneration system that we want to introduce has dropped. Each institution will be able to choose its own tariff and this must be the same for its entire ATM network along the Peninsula. And it will be a cost that the consumer will know before withdrawing ".
On this last point, the CEO of Bancomat specifies that “67 per cent of people today are not aware of how much it costs to withdraw. And of those 33 percent who claim to know him, 65 percent actually have a wrong idea ”.
In addition, he adds, "with the new commission system" it will be possible to guarantee adequate remuneration also to merchants who will be able to give cash through POS ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/bancomat-commissioni-come-cambiano/ on Tue, 08 Feb 2022 08:31:29 +0000.