ATMs are great. They’re convenient, save you time, and let you avoid long lines. But are they profitable? That depends on how you use them and which ATM you use. Here’s what you need to know about using ATMs—and why it can be worth paying a little more for some ATMs now and then
ATM withdrawals can save you money.
ATM withdrawals are cheaper than using a bank teller.
If you need to withdraw cash from an ATM in person, it will be cheaper than using the services of a bank teller. The average transaction fee for an ATM is $2.75 per withdrawal, according to Bankrate.com. That’s more than twice as much as the average $1 charge for using a human teller in person or by phone (according to FinancesOnline).
ATM withdrawals are cheaper than using a check-cashing service or payday lender.
If you want fast access to your money but don’t have an account with an online bank or credit union, another option is to go through one of the many companies that offer check cashing and payday loans at their locations across town—but those services come at a cost: roughly $5–$8 on top of every dollar borrowed (depending on where you live). Compared with that steep price tag, ATM fees look like nothing!
ATM withdrawals are cheaper than getting cash from pawn shops or payday lenders
ATM fees are rising.
- ATM fees are rising. The average ATM user pays $4 per transaction or $1 billion in annual costs. Those numbers seem shocking at first glance in the United States, where ATMs are ubiquitous and free to use. But they’re not just a feature of American culture: overseas cash machines charge anywhere from $0 to $5 per withdrawal depending on where they’re located and who owns them (some banks charge more than others).
- At the same time, though, there’s a good reason for these increases: operating costs have risen dramatically over the last few years due to labor and other expenses like currency exchange rates. While maintenance costs have declined slightly for some locations where machines are regularly used (such as retail stores), overall operating costs have increased by 5 percent annually since 2009. These rising costs mean more money needs to be made through fees if ATMs are going to remain profitable—and that means customers will need to start paying up if they want access to cash via an automated teller machine.*
It’s getting easier to avoid fees.
- If you want to avoid ATM fees, consider using a bank that doesn’t charge them. Some banks offer cards with no purchase fees and reward points for using their ATMs; this makes them more competitive than other banks that charge fees.
- Visit a credit union. Credit unions are non-profit lenders owned by their members, so they don’t have to make as much money from each transaction as traditional banks do. As a result, many credit unions don’t charge any fees for taking out cash from an ATM—or they only charge small amounts (like $1 per withdrawal).
- Pick the right bank for your needs. Banks generally charge different amounts for withdrawals depending on your account with them and where the ATM is located; use Bankrate’s fee finder tool to see how much it costs at specific ATMs near your home or work.
Your bank may cover some of your fees.
As you can imagine, banks are trying to stay competitive and keep costs down. Your bank may cover some of your fees. This is a win-win situation for everyone involved. Banks get more customers, which means they’ll have more money coming in from their customers’ deposits and withdrawals. You’ll be able to avoid paying a lot of fees when you use an ATM from your bank—which is excellent!
The same goes for debit cards: banks are trying to attract new customers by offering free checks or low-cost checking accounts that don’t charge overdraft fees. To do this, they need people like YOU using their services!
It’s worth paying a little more for some ATMs now and then.
ATM fees were the same for a long time, no matter which machine you used. If you had an account with Bank A and wanted to withdraw money from an ATM at Bank B, they’d charge you $2.50 plus whatever their fee was for using their services. But that’s changed in recent years as banks have started competing for customers by offering lower and lower costs on cash withdrawals—and sometimes even waiving the fee altogether.
As with most things about money and banks, it’s essential to understand what you’re getting into before making any big decisions about ATMs. You may not want to waste your time visiting a bank with only twelve ATMs in the city just because it offers free ones!
It costs you money to use an ATM, but that doesn’t mean it is not profitable to use ATMs
While it may seem like ATMs are free to use, you’re paying a fee. The cost of each transaction varies depending on the bank and can be as much as $3 per withdrawal. The catch is that these fees aren’t charged directly to the customer but instead absorbed into the costs of running an ATM network.
If you’re only using ATMs for free cash, you’re losing money with every withdrawal—assuming your bank doesn’t charge even higher fees for using another bank’s ATM in their network. But if you need more than just cash from an ATM, there are ways to make it profitable:
- If you don’t need cash at all and want to check your balance or transfer money between accounts without going through a teller line or online banking (which may have its commission), then find one of those new “nano” ATMs with no minimum deposit will save time and money while also helping keep lines shorter at traditional branches.* You can also try getting around some fees by setting up alerts on your phone when balances drop below specific amounts so that they won’t trigger transactions when they shouldn’t (like when getting out of town).
We hope you found this helpful article. If you have any questions about ATM fees or profitability, don’t hesitate to get in touch with us! We’re happy to answer any questions you may have and help ensure that your business continues running smoothly.