Withdrawal fees too high? Adjacent ATM may be cheaper under new BSP scheme

MANILA, Philippines — Are your cash machine withdrawal fees too high? Look around because the adjacent automated teller machine may charge you less for the same transaction starting in April.

ATM users will soon pay fees depending on rates set by banks that own the specific machines they are transacting with — a departure from the current system where flat rates are set by the financial institution where the client maintains an account.

The new scheme is expected to foster greater competition and transparency among banks which are expected to start offering more attractive pricing levels to encourage users to withdraw from their ATMs.

In a statement, the Bangko Sentral ng Pilipinas said that the so-called acquirer-based ATM fee charging — which will come into effect on April 7 — is one of the conditions the regulator set for the lifting the moratorium on cash machine fee adjustments that was implemented in 2013.

Currently, a cardholder is charged by his/her bank the same ATM fees for transacting at other ATM terminals. With the new system, a financial institution can set ATM fees for non-customers, while continuing to offer free ATM withdrawal and balance inquiry services to its customers.

“The method is more advantageous to the transacting public as it promotes transparency and empowers consumers to choose the financial institution that satisfies their needs in terms of fees and quality of service,” the central bank said.

The regulator explained that the new pricing method will allow financial institutions that deploy ATMs to be “reasonably compensated” for servicing non-customers, and also incentivizes them to set-up more terminals, which widens the reach of banking services in the country.

“Providing ATM services entails cost, including the counting and transporting of cash and its loading in ATMs; using electricity; providing security; and other expenses to operate and maintain said machines,” the cnetral bank said. “BSP-supervised financial institutions are required to employ safeguards to ensure that their clients can safely and conveniently use ATMs.”

The regulator said an adjustments in fees charged by banks to its non-customers are expected with the adoption of the new pricing scheme. At present, ATM withdrawal fees range from P10-P15, which has been the case for more than seven years. By early April, ATM withdrawal fees are expected to range from P10-P18.

“BSP will review and approve all requests for ATM fee adjustments, and will consider the reasonable cost for ensuring the reliability and security of ATM services,” it said.

The adoption of the the new ATM pricing scheme also supports the implementation of a more straightforward way of imposing fees as well as enhancements in fee disclosure requirements.

The new system fosters transparent pricing as fees are required to be disclosed to a cardholder before an ATM transaction.

“Users will be able to make better, more informed decisions on how and where they wish to transact based on fees posted in the ATM terminals,” the central bank said.

In addition to ATMs, customers may also access financial services or perform payment transactions through InstaPay and PESONet.