Each time a consumer uses an ATM that does not belong to the bank that issued their card, a fee is paid by the bank to the ATM operator – another bank or non-bank operator. In the case where the ATM is operated by the issuing bank, no fee is paid – this is an ‘on-us’ transaction. As ATM estates have grown, the share of ‘on-us’ transactions has declined and overall interchange fees paid by issuing banks have increased.
Many countries have opted to lower interchange fees which amounts to reducing the fees paid by card issuers to ATM operators. This has been the case in the UK, where Link has lowered fees by 20% from 25 pense to 20 pence. It has also happened in India, which has recently seen ATM numbers decline in spite of increasing demand for cash.
France has seen the number of ATMs drop by 5.3% between 2015 and 2018, according to the Banque de France, which is undertaking an Access to Cash review. At the end of 2018, there were 52,696 ATMs in France – down from 55,629 at the end of 2015, mostly due to the closure of bank branches. This represents 815 ATMs per million inhabitants, slightly below the European average of 846 ATMs. According to the central bank, there is no overall issue with ATM distribution as 99% of the population can reach an ATM in less than 15 minutes by car. But there is a risk that remote and rural communities may face a “bank desertification”. There are frequent reports in the French media, of small towns petitioning against the closure of the local ATM.
French banks have been discussing within the interbank organisation Cartes Bancaires which manages the domestic card scheme. They are proposing to increase the ATM interchange fee from 57 cents to €1 in order to better reflect the actual costs of operating an ATM. The current fee has not been changed since 2011. The ai mis merely to better balance the income between issuers and ATM operators. The consumer will not be impacted.