Australian banks are back in the firing line for refusing to follow the UK's move to scrap some ATM fees. The Big Four are sticking to their guns and say customers must continue to cough up.
British Banks have recently abolished ATM fees when customers use an alternative bank's ATM facilities.
"It's really time our banks stopped ripping off account holders," finance policy officer at the Australian Consumers Association, Louise Petschler, told ZDNet.
"This yet again shows that Australian banks are clearly behind the eight ball in providing affordable services to customers."
Currently, ATM fees are set by complex interchange arrangements between the banks.
For example, if a Westpac customer used a Commonwealth Bank ATM the transaction fee is set by Westpac which would give the Commonwealth a slice of the pie.
Therefore, whilst the average cost of an ATM transaction to the bank is just 49 cents, the intercharge arrangement means the average cost of the transaction for the customer is AU$1.30.
"It essentially amounts to profiteering," Petschler said.
Australian banks, however, argue that they cannot take the same path as British banks as different fee structures are in place.
"Australian and UK banking systems are quite different," said National Australia Bank spokesperson Julie McBeth.
Whereas UK banks have "quite hefty margins" on home loans, which basically subsidise ATM fees, Australian banks have moved to a more "user pay" system, according to McBeth.
"It's preferable for [Australian] customers to pay for the channels they're using," she claimed.
The Commonwealth Bank's executive manager of corporate affairs, Bryan Fitzgerald, agreed.
"Fee structures in Australia and the UK are not comparable," Fitzgerald said.
"I believe in the UK housing loan customers pay higher interest rates to cross subsidise account transaction fees," Fitzgerald said.
Whilst Petschler agrees that UK customers don't pay much in fees compared to their Australian counterparts, she believes if Britain's profitable banks can do this for customers, there's no reason Australian banks can't.
"There is clearly enormous scope for the banks to reduce ATM fees and we would like to see banks this year take this very seriously."
Although Westpac claimed it is "happy to look at anything", it said it favoured a "direct charging model".
Under such a model, if a customer used a Westpac ATM, Westpac would charge the fee without any intercharge agreements in place.
"We believe this will result in a price reduction for consumers for up to 25 percent," said Westpac representative David Lording.
Lording said Westpac called on the other banks to agree to the system which could be implemented within 12 months.
"Once the bank that owns the ATM sets the fee, anything will be possible," Lording said. "It will increase competition and will be good business to attract other bank's customers."
The ANZ bank agreed that it was unlikely to abolish ATM fees.
"There are real costs associated with using foreign ATMs in Australia, with each bank charging intercharge fees for using their facility," the ANZ's Paul Edwards said.
"If there was the situation in the future where ATM costs were reduced we'd consider passing that on to our customers but at the moment that situation doesn't exist," Edwards added.
Refusing to weigh in too heavily, the Australian Consumer and Competition Commission said it "would encourage [Australian] banks to follow suit, however it is a commercial decision on their part".
