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Belgian Banks will Merge their ATM Networks

Categories : Cash does not require a technology infrastructure, Cash is efficient
January 13, 2020
Published in : ATM, Availability, Belgium, Commercial bank, Shared infrastructure
The four major Belgian banks will follow the example of Finland, Sweden and the Netherlands and will pool their ATM networks under a single white label brand.
Guillaume Lepecq

Belfius, BNP Paribas Fortis, ING and KBC will jointly operate a single network of ATMs under a neutral brand name. After lengthy negotiations, the four major banks have reached an agreement to pool their ATMs. The banks are opting for full integration, they say in a joint press release. That means that there will be a new company with a new neutral brand. This looks very similar to the Netherlands where the major banks have merged their ATMs under the Geldmaat label.

A response to branch and ATM closures

These bank-neutral ATMs are a response to the closure en masse of bank branches. According to Febelfin, the Belgian banking federation, the number of ATMs has declined from 8,754 units in 2015 to 7,869 today.  The new ATMs will be mostly located offsite and as a result, they will be unaffected by any further closures. By working together, banks expect to reduce costs but also build an optimised network. Today, there are many ATMs in some busy areas and not enough in remote locations. The launch of the new network will be phased, starting mid-2021. According to the banks, it will provide a cash dispenser within a range of 5 kilometers for 95 percent of the population.

Reduce costs and optimise the network

In 2018, a study by Deloitte concluded that the ATM cost the Belgian banks a total of 161 million euros in 2016. That is 54 cents per transaction. It is worth noting however, that in Belgium, ATMs incur a tax or approximately € 4,000 per machine and some are calling for its removal to avoid the ‘bank desertification’ particularly in rural areas.

No agreement has been reached so far with the five smaller banks that are working on a similar scenario. Crelan, AXA Bank, Argenta, VDK and Bpost have already set up the joint venture Jofico (Joint Financial Company) to work together on ATMs. They are already starting this year but have limited the scope of cooperation as they will each retain their own identity. Attempts, including from the Febelfin, to have the two initiatives work together, have apparently not paid off. The major banks have nonetheless opened the door a little and say that any bank with an ATM network in Belgium can join.

Back to the future

With this initiative, the major banks return to the 1989 situation when their two separate networks from the 80s, Bancontact and Mister Cash, were merged. The machines operated then also under a joint venture, before they were transferred back to the individual banks.

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