Surcharge limitations would create a toxic situation for consumers and small businesses alike.
Cash Connect issued a statement Thursday imploring ATM operators to lobby against surcharge and interchange limitations proposed in Congress, the American Banker reports. The vault-cash provider warns the measure proposed by Sen. Tom Harkin (D-Iowa) would be “devastating to the ATM industry and have broad negative implications for consumers and the economy.”
The proposed amendment would cork ATM withdrawal fees at 50 cents per transaction.
Such a low surcharge “would not generate enough revenue to cover the cost of operating many ATMs,” writes John Clatworthy, Cash Connect’s senior vice president of client services. The cap would effectively reduce the number of automated teller machines available to consumers.
Small business would also suffer, Clatworthy says, as they “rely on ATM surcharge revenue to stay in business and create jobs.”
Clatworthy cites a 2006 study published by the Star Network, which put the average monthly cost for banks and independent sales organizations to deploy an off-premise ATM at $1,450, and the total surcharge and interchange revenue of the machines at $1,013. This data suggests the cost per transaction for ISO ATMs is roughly $1.75, almost five times the 36 cent figure projected by Sen. Harkin.
The Senate blocked an amendment brought to the floor by Sen. Tom Harkin (D-Iowa) that would cap ATM fees at 50 cents, the Huffington Post reports.
Financial institutions and trade groups oppose the measure and contend that ATM fee limitations will lead to the reduction in the number of ATMs available for consumers. The amendment, along with several consumer-friendly measures backed by Democrats, is being obstructed by Republican objections.