Banks join the surcharge-free bandwagon

NEW YORK (5/6/05)--Banks are discovering what credit unions have known all along: Waiving ATM surcharges attracts consumers.

But some banks are choosing to offer customers monthly rebates while credit unions use surcharge-free networks such as CO-OP Network and Allpoint to get the same effect without the costs tied to rebates, according to ATM & Debit News (May 5).

According to the Credit Union National Association's new Credit Union Fees Survey, 67% of credit unions that offer access to ATMs belong to a surcharge-free network.

Two banks, PNC Financial Services Group. Inc., Pittsburgh, and Commerce Bancorp. Inc., New Jersey, recently announced they are reimbursing customers for surcharges incurred for using foreign or non-bank-owned ATMs.

Joining a surcharge-free network is less expensive than rebating, says Ben Psillas, president of Allpoint, a Bethesda, Md. network that offers surcharge-free transactions. He told ATM & Debit News that capping rebates based on minimum balances trains consumers to limit ATM use, including that of the credit union's or bank's ATM. Many consumers make sure they don't go over the set limit of out-of-network transactions, he said.

One credit union, Lutherville, Md.-based First Financial FCU, spent $22,000 a month in rebates to its 52,000 members, said President Robert Windsor in the article. In July, the $514.5 million asset credit union joined Allpoint. Windsor said the credit union is saving $10,000 a month and providing a vast number of ATM locations for members. Allpoint charges a fee based on debit card portfolio size, not per transaction.

While some banks opting to use either rebates or join a surcharge-free network, one credit union does both. Meadows CU, a $136.6 million asset credit union based in Arlington Heights, Ill., owns one ATM and uses blanket surcharge-free guarantees to its debit cardholders as the focal point of its marketing efforts.

Using a surcharge-free network puts the credit union "squarely with our larger competitors in regards to convenience," John Antos, vice president of marketing, told ATM & Debit News. Antos says the rebates are nice for members on the go. "It's keeping us in the game."

  Resource Link
CUNA's Credit Union Fees Survey


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