Economics

ATMs Turn 40, Celebrate by Charging Me $2 For My Own Darn Money

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old fashioned atm

Forget about the 40th anniversary of the Summer of Love, this week marks a far more important milestone. In 1967, the first ATM was installed outside Barclay's near London. This marvelous invention freed us from teller lines, relieved the strain on many mattresses, and blessedly reduced the number of human interactions necessary in any given day. ATMs dispense $25 billion a day worldwide, so celebrate by grabbing some cash of your own.

Read a neat paper on the effects of surcharges on ATM convenience, which Tyler Cowen dubbed the Anti-Market Paper of the Month a while back.

FYI: This fact came to you courtesy of the fine trivia night hosted at Dempsey's in Manhattan, but was confirmed by the fine folks at CNET.

If you prefer love to cold hard cash, check out this month's cover story about "how left-wing hippies and right-wing fundamentalists created a libertarian Ameria."

NEXT: American Vampires in Brazil

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  1. Oh quit whining. My family back in Slovakia told me that they are getting charged for every bank transaction, even cash deposits, averaging $5 per transaction (at purchasing power parity). And now some companies, such as wireless providers began charging customers a transaction fee who want to pay their bills in cash instead of making a bank transfer.

  2. I woke up about an hour ago (1:00) to a phone call from my mom telling me that I have been getting a $4.00 surcharge from an ATM I was using. Because I was so disoriented, it took me about 10 minuets of bickering to figure out what she was talking about.
    I hope she didn’t think I was stoned or something.

  3. Let’s be real. If you use your OWN BANK’S ATM you don’t get hammered with an ATM fee. If you do, change banks ASAP.

    Brought to you as a public service by the Cheapskates of America.

  4. In 1967, the first ATM was installed outside Barclay’s near London.

    LOL Barclay’s? As in ‘belonging to Barclay’? What a cute Yank you are KMW.

    1967 you say? Well before I would have guessed.

  5. Yeah, ATM fees, who pays them? My ATM fee total by the end of the year might be, $12.

    Secret: Use the ATM’s from your own bank and you don’t get charged. Pass it on.

  6. The only time I recall ever paying an ATM fee was at a strip club. And it was money well spent.

  7. Gloat Post:

    Not only does my bank pay me 5.25% on my checking, it another bank charges me an ATM fee, my bank will pays it.
    http://www.phelpscountybank.com/Wdetail.cfm?detailId=1017

    I’ve had my money with them since Nov. 100% employee owned, I keep expecting the employees to send me a picture postcard of them lying on some South American Beach.

  8. For what it’s worth … banks charge for foreign transactions (ATM transactions initiated at other banks) to cover the cost of developing and implementing the switching systems that make foreign transactions possible in the first place.

    You can’t expect to walk into Wells Fargo and withdraw money at the teller window from your Bank of America account. But you can do that at an ATM. That costs money.

  9. Yeah, I effing hate it when people complain about being charged for their own money.

    Seriously, get a clue.. and a credit/debit card.

  10. In some countries (e.g., Saudi Arabia), if you use an ATM owned by a different bank than your, your bank pays the fee to the other bank. Banks that places their ATMs in high traffic areas end up being the winners.

  11. The only time I recall ever paying an ATM fee was at a strip club. And it was money well spent.

    Should we ask where you inserted the card?

  12. Should we ask where you inserted the card?

    Only the mechanical slot had a cash back feature.

  13. The only time I recall ever paying an ATM fee was at a strip club. And it was money well spent.

    Deposit or withdrawal?

  14. I created my own solution to this problem of fees for my money.

    My checking account is with a bank which doesn’t have that many ATMs available (esp. in the areas where I work and live) — but I have been banking there for over 10 years and I have lots of auto-debit and direct deposits set up. So changing isn’t an option for me.

    In the Chicago metro area, Chase (formerly Bank One), is the prominent bank. There is basically always a Chase ATM within a couple of blocks of wherever I am.

    So I went into chase and opened a bare bones Free checking account. It has no fees associated with it as long as I keep a 0 balanace or higher. (As a personal inside joke to myself I keep $4.20 in it to keep it active because they will inactivate a $0 balance account if not used enough). I don’t even have checks for this account (other than the starter checks they gave me)

    So now when I need cash, I write myself a check from my primary account, deposit it via ATM into my Chase checking account, and then immediately withdraw the money I just deposited.

    No fees to pay, and I get a “free loan” for a couple of days — since it takes 3-4 business days for checks to clear and the money to be taken from my primary account. And they get the luxury of eating the expense having somone deal with real check instead of merely an electronic ACH transaction.

  15. The only time I recall ever paying an ATM fee was at a strip club. And it was money well spent.

    At this one strip club I used to go to, the ATM fees were $5/transaction and you could only do withdraw $50/transaction — or you could get your hand stamped, walk across the street to the Amoco and use their ATM and walk back to the strip club and re-enter with the stamped hand.

  16. Check this out from the article:

    One of the most remote is at the McMurdo station at the South Pole, where it serves a small population of Antarctic researchers.

    I wonder who gets the privilege of balancing that ATM?

  17. ChicagoTom,

    If your happy with that system then FARB. It just seems to defeat the purpose if you have to write a check every time you need a couple of yuppie food stamps. Why not keep $60-$600 in there and write one check a month?

  18. Warren,

    I usually don’t need cash that often. The majority of my expenses go on my credit card that gives me cash back for every purchase which I pay off every month.

    When I do need cash, I usually will do $200 at a time so I won’t need to go back any time soon. In essence I am writing a check once a month or so.

    I don’t want to keep money in there for 2 reasons:

    1. I don’t want Chase/Bank One to make money off of my deposits (despite the small amount it would be) — I want my transactions with them to be as costly to them as possible (I know its petty but I dislike Chase/Bank One quite a bit for multiple reasons)

    2. My main checking account gives me a modest level of interest so I prefer to have it sitting there while idle to gain some interest.

    But if I found myself having to cash checks this way weekly or so, I would probably keep some money in there as u suggest.

  19. whenever someone is standing behind me while I’m getting money from the ATM, I like to grab the cash, turn around and yell “I won!”
    The first time I did it, some one laughed, every time afterwards, nothing.

  20. that’s because you stole it from Seinfeld. Joke Re-gifter!

  21. ChicagoTom,

    Keep that up and Chase will eventually charge you big bucks for NSF fees. I’m surprised they haven’t already. They make it pretty clear that checks deposited aren’t available for immediate withdrawal.

  22. Fees are for suckers.
    And teller lines are for big fat suckers.
    And Mexicans.

  23. Seriously, get a clue.. and a credit/debit card.

    Word. And who uses cash these days, anyway? Strip clubs, aside.

  24. Does anyone else remember when ATMs first came out? The reason they were pushed by the banks wasn’t because they were so concerned with providing extra convenience to their customers. It was so the banks could cut customer service staff. Every transaction that they could get you to punch in yourself was one that they didn’t need to pay a teller for. (Like pushing the self-service scanner lanes in grocery stores now.) The ATMs were originally free; it was only after they got customers used to using them that they started plugging in the fees. So I have no sympathy for the banks– they’re now making out on both sides of the equation (cutting costs and charging you to take out your own money).

    That said, there are still ways for the customer to reduce or avoid the fees. Like others mention, use your own bank’s machine. Use the ‘cash back’ function when you use your debit card for another direct purchase at a grocery store. Or just make fewer ATM withdrawals for larger amounts. $1.50 on a $20 withdrawal is pretty nasty; $1.50 on a max daily amount like $300 is a much smaller bite.

  25. They make it pretty clear that checks deposited aren’t available for immediate withdrawal.

    DR K — you are very very mistaken.

    I’ve been doing this for 4 years now.

    THey make it clear that checks deposited MAY NOT BE available for immediate withdrawl.

    Furthermore, the way I figured out to do this is their teller told me.

    One day I went in to the teller to cash a check drawn on my primary account. The teller said that she couldn’t because I didn’t have enough money in my Chase account to cover the check. She then said, “But if you deposit it via the ATM, the funds will be there and you will be able to withdraw it from the ATM.”

    Puzzled I said, “Well wouldn’t you cashing it here in essence be the same thing”. She said yes it would, but a teller can’t cash it without the funds to cover the check. That’s just the way the bank works.

  26. Does anyone else remember when ATMs first came out? The reason they were pushed by the banks wasn’t because they were so concerned with providing extra convenience to their customers. It was so the banks could cut customer service staff. Every transaction that they could get you to punch in yourself was one that they didn’t need to pay a teller for

    So true. In college a couple of my friends opened a checking account with “First Chicago” (which was bought by Bank One, which was bought by Chas) — at the time (1994) they were told that any transaction that could be done at an ATM , but is done via teller would incur a fee. They were doing this to reduce costs and shorten the lines at the bank.

    We’ve come a long way

  27. I’m with Katherine on this. My bank, which I believe calls itself Chase this week, charges a dollar to use its own ATM’s, unless I go to the ones actually at the bank building. So mostly I do without cash, or get an extra $20 with the debit card at the grocery store. Still, it is indeed galling to be charged a fee for having the account, then another fee for actually, you know, using my own money.

  28. that’s because you stole it from Seinfeld. Joke Re-gifter!
    What!? NOOO!

  29. ChicagoTom,

    All I’m saying is that given the reliance bank profits have on fee income it’s only a matter of time before they stop this “courtesy pay” behavior you’re currently enjoying. And since they already tell you deposits MAY not be immediately available, they aren’t likely to warn you in advance, but just start whacking you with fees.

  30. So I have no sympathy for the banks– they’re now making out on both sides of the equation (cutting costs and charging you to take out your own money).

    Whaaaa? OK…for the last time…when a bank charges you an ATM fee for a foreign ATM withdrawal, they are not “charging you to take out your own money”. This would only be the case if they were charging you a fee at an ATM they owned. And nobody (that I’m aware of) does this. Why? For exactly the reason you specify…banks still have an incentive to minimize customer service personnel by automating transactions.

  31. MP-Read Karen’s comment.

  32. My bank, which I believe calls itself Chase this week, charges a dollar to use its own ATM’s, unless I go to the ones actually at the bank building.

    OK…that one is new to me…although I’d argue that it’s still reasonable to issue a convenience charge for ATMs outside of the branch.

  33. It may be reasonable for them to do it, but that won’t stop us from complaining about it. That’s our God-given right!

    🙂

  34. Dear Katherine,

    I hate to tell you, but it ain’t your “own darn money.” You loaned it to the bank, and are thus a creditor. (Or are you keeping it all in a safe deposit box?)

    Did the bank promise to pay all of the fees for you using someone else’s network to reclaim your principle ‘investment?’ If so, you are indeed being taken advantage of. Otherwise, you are merely paying for a convenience that you are too apathetic to understand. Of course, blaming someone else for your problems is always easier than trying to understand why they exist.

    As always, there is never any reason at reason.com. Merely incoherent ‘victims’ and other tools of irrationality.

  35. It is annoying, this hankering for nonsensical fee income. It does little to make banks beloved among their customer base. There’s also their lovely habit of reserving the right to change credit and deposit terms without much notice to you.

    I could tell some stories. Unfortunately, I’m precluded by attorney-client privilege.

  36. My bank is Chase. They don’t charge fees if you use their ATM’s. I live in Manhattan where there is a Chase branch every few blocks (or so it seems), and there are Chase ATM’s in every Duane Reed store. So, it’s not much of an inconvenience to me. There are only service charges for using other banks’ ATM’s.

    That said, I stopped using my Chase Visa card about a year ago after they incorrectly put finance charges on my bills that had been paid in full several times in a six month period.

  37. I use USAA, which is entirely on-line and has no ATMs of its own. It compensates (literally) by refunding me every ATM fee I am charged.

    Such a deal!

  38. As always, there is never any reason at reason.com. Merely incoherent ‘victims’ and other tools of irrationality.

    Drink!

  39. Who cares about the fees? The service is well worth it. That $2 fee charged by the nearest ATM could easily save you 10 mins (which is well worth it if you value your time more than $12/hr).

  40. Holy crap, Warren is from Rolla, MO? Have I ever seen him? I’m the guy who runs down 10th and Forum every day.

    Also, I am switching banks.

  41. Yeah, because when you use an out of network ATM it is 100% free to the bank to process that as an ACH transaction against your bank. It reconciles instantly and there is nothing involved in getting the funds moved from your bank to theirs. Transactions have no costs! UP IS DOWN!

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