Why Are There ATM Fees?

From fast food to one hour delivery options, American’s favor fast, convenient options, and banking is not an exception. According to Tremont Capital Group, there are 420,000 ATMs in the US, divided evenly between bank affiliated and independently operated machines, to appease consumer’s 24/7 banking needs. Although this provides a convenient option for consumers, it can come at a cost.
Most banks offer free ATM services for their customers, but both banks and independent ATM operators may issue a convenience fee. This fee is in place to recover the cost of the ATM due to regular maintenance, compliance inspections, cash reloads and transaction fees. In addition, some banks charge an out-of-network fee, which is imposed by the individual’s bank to discourage using another bank’s or independently operated ATM. According to Bankrate Inc., this results in an average cost of $4.52 for the consumer, $2.88 in convenience fees and $1.64 in out-of-network fees.
Freestanding ATMs are located in ideal locations for consumers, whether it is a gas station, mall, restaurant or stadium, but this convenience comes at a price. Due to off-site maintenance and cash reloading, plus all the other expenses of an ATM, the ATM operator normally receives a 6% profit margin. ATMs function like any business, and there has to be a cost of service.