New ATM policy to fuel consolidation

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    ATMs in a Batangas mall. (Contributed photo)

    A consumer group said a new policy that changes the rules on fees on automated teller machine (ATM) transactions will  breed unfair competition.

    And while the new policy might encourage Filipinos to use mobile platforms and digital wallets, this will also prompt consolidation, according to Vic Dimagiba, convenor of Laban Konsyumer Inc.

    “That’s laying the foundation of mergers and acquisitions as we go digital payment,” Dimagina said in a statement dated Feb. 12, 2021.

    In its “Acquirer-based ATM Fee Charging,” policy, the Bangko Sentral ng Pilipinas has allowed  banks to adjust their cash machine fees effecting April 7.

    A bank can charge  ATM fees for those who are not customers  of that bank. Customers of that bank in turn will continue to enjoy free  withdrawal and balance inquiry services.

    “ This new policy can be a way of indirectly marginalizing banks with smaller branch networks since over the long term, depositors may be enticed to transfer their accounts to the bigger banks. Do we want huge banks or friendly neighborhood banks who know us and our needs?,” Dimagiba said.

    Dimagiba added the new policy is more beneficial to banks with large branch networks because of the greater probability of more people using their ATMs since they are more in number.

    “Therefore… they will benefit more from the new sharing formula, and therefore it makes sense to them to increase their fees too,” he added.

    Dimagiba urged banks to instead prioritize ensuring  depositors develop trust in online commerce payments by strengthening digital privacy, security and eliminate offline downtime.

    LKI earlier raised concern over the additional burden to the ordinary customer of the new policy, and questioned  if there have been actual improvements and technological and infrastructure enhancements in the current ATM services that justify the increased fees or the need for them.

    ATM  charges have been fixed at between P10 and P15  per withdrawal since 2013. These will go up to P10 to P18 by April 7.

    Dimagiba went to explain that in the distribution of ATM fees in one ATM transaction, the sharing is between the bank that issued the ATM card (issuer bank), the bank whose ATM machine was used to transact (acquirer bank) and the network that connects them (Megalink or Bancnet).”

    “In the old scheme, the base is the fee charged by the issuer bank and from this is deducted a fixed amount that goes to the acquirer bank, a fixed amount that goes to the network, and the residual amount goes to the issuer bank. In the new BSP policy, the base is the fee charged by the acquirer bank, and fixed amounts go to the issuer bank and the network. The residual amount goes to the acquirer bank,” he said.