ATM fees sting the pocket

Under a State Bank recent circular, from March 1, 2013 banks will be allowed to charge ATM users for on-us transactions, or those made on machines of the same banks.

Vietcombank possesses an expansive network of 1,800 ATMs. Each day, the bank needs to feed over VND1 billion ($48,000) to each ATM, meaning its ATM system eats up around VND2 trillion ($95 million) each day, according to Vietcombank’s Card Centre director Nguyen Thanh Hang.

Each transaction of customers at ATMs costs the bank around VND7,000-VND9,000. Therefore, with fee level of VND1,000 per transaction, the bank still incurs huge losses, according to a bank source.

Head of State Bank’s Payment Department Bui Quang Tien said: “Director of a commercial bank branch had told me the branch incurs VND22 million ($1,050) losses each month from ATM services based on investment into ATM and associated fees.”

Therefore, Tien confirmed the SBV supported banks’ proposal to charge on ATM transactions to balance the interests between banks and their customers.

Tien argued that charging on ATM transactions could inspire banks to further invest in improving card services, from there promoting card payment among people.

In fact, only around 30 per cent of banks, mainly bigger ones, charge on on-us ATM transactions. Meanwhile, to appeal to customers, many smaller banks said they would not collect such fees at least in the near term.

TienPhong Bank general director Nguyen Hung said the bank would not charge on ATM transactions in the coming period. Other banks like Ban Viet, Nam A, Mekong Development Bank reportedly are taking the same stance.

According to the SBV, by the end of February 27, 2013, only 34 banks reported to the SBV on their fee plan for ATM transactions. Of these,  two banks proposed VND200-500 fees per transaction, 10 banks charge VND1,000 per transaction while the remaining 22 banks envisaged not collecting the fee.