Cash Machine Withdraw Fees..

Yep, if either Gautam Gowrisankaran Visiting Scholar, Washington University in St. Louis and NBER Or John Krainer Economist

are posting here, I agree I was wrong :-)

But in the world of the web anyone who has read the article I posted a link to is now an expert :-)

Bull. I'm sure even you have seen much bigger loads of crap on usenet.

That it may be, but he's only confusing it with the cashback mechanism.

So are bank branches.

The relevant comparison is not between providing a machine and not, but between providing a machine and providing counter services. The cost of buying and delivering cash is common to both and is therefore irrelevant to the comparison.

I did not mean to imply they were free when I said "do not cost anything". As I'm sure you understand, I intended this to mean that they (not only) do not have a positive cost, but indeed a negative one *relative to* the alternative cost of providing more branch services than they need to do now that they've installed so many machines.

Sorry, I totally misunderstood your logic.

But something like your suggestion:

"It might perhaps make more sense for banks to adopt an altogether different charging structure. Something like 10 a quarter per account, which includes 25 free transactions, and 40p per additional transaction. Cash withdrawals, whether at a counter or a machine, should count as ordinary transactions, so 40p if over the limit of

25 per quarter, and free otherwise"

Is almost certainly how things will end up. Which will make it a nightmare to decide which bank is cheapest for you - and thus let them more easilly hide the costs of banking. Time to buy some banking stock :-)

"Miss L. Toe" wrote

It would also tend to *reduce* the number of accounts which each bank has -- people would prefer to stick to just one account rather than having multiple ones. Is that "good" or "bad" for the banks?

[Obviously, the accounts that are "kept" will suddenly have more transactions going through them; the accounts that are "lost" will stop those banks being able to sell their "other products"...]

At 23:52:30 on 10/10/2006, Ronald Raygun delighted uk.finance by announcing:

Indeed. They're neither owned nor operated by the banks, so of course they don't cost them anything.

only those with the capacity to understand....and this is Usenet!

Wasn't it Eddington who when asked by a journalist if it was true that only

3 people, including Einstein, understood relativity , was silent and then in response to a quizzical look from the journalist said 'I'm trying to think who the third person is'

No it isn't. Here are my sources.

5 "We support retailer filled sites where the retailer provides the cash to be dispensed"

Hanco pioneered merchant-fill in the United Kingdom, where the merchant uses their own cash to fill the cash machine. You only need to put in as much as you need for a single day's transactions. The amount withdrawn by your customer is then transferred to your nominated business bank account, saving you trips to the bank.

As part of the Royal Bank of Scotland Group, one of the world's leading financial services groups, you can be sure of the highest standards of service in all our dealings with you.

I would have thought that the notes from customers will likely be crumpled and badly suited for machine dispensing. Also there is more risk of forged notes finding their way into the ATM compared with notes supplied by the bank.

What do you mean local Co-op - is it actually a Co-op Bank ATM?

I have been told that a full machine holds 100,000 gbp

Machines are quite good these days at handling crumpled notes. Self-service supermarket checkouts ask you to stuff your notes into a slot, and if they weren't capable of coping with notes in a wide variety of conditions, the machines would fail big-time to catch on.

Even banks themselves don't exclusively stock their machines with pristine new notes any longer, though they may have done in the early days.

Fair point. Who guarantees them? The shop would have to carry the can, I expect.

I stand corrected and apologise - I guess I dont see enough of the bad part of town.

Do many people buy 'other' products from banks?

Apart from a mortgage bought from my bank because 'other' lenders did not understand my freelance income I've never bought anything from 'my' current bank and certainly nothing from the bank of a dormant account

tim

Isn't that what all bad financial products are?

tim

True.

True.

The flaw in your argument, though, is that the machines usually found in supermarkets, petrol stations and shops which charge these fees are not operated by the 'Banks' to which you refer but by independent companies.

Not so. 'Free' (ahem) banking for personal customers is relatively recent, i.e with 25 years (ish)..

Yes, this is the case where it is the bank that provides the machine.

These fees arent charged by the Banks to which you refer, but by the ATM company.

True, but the market wont accept it withut some other 'perceived' or 'added value' benefit. That is why 'Gold', Premier', 'Super Plus', 'Twin Car with Fuel Injection' accounts with monthly fees came into being.

They do, but at a paltry rate.

In message , Tumbleweed writes

A Clearing Bank ATM site costs between £60k to £140k to install from scratch, i.e. when they have to make a new hole in the wall. A mere machine upgrade is far less. They generally hold a lot more dosh than the non bank owned machines because their average withdrawal and number of withdrawals is much higher and are built and situated to a far higher standard of security. I do not know the cost of using a security company to maintain them as my own experience is only related to branch locations in which the machine was maintained by the existing branch staff.

Extra running costs in branches is relatively small except that the notes need to be unissued new notes which have to be specially acquired from the BoE at a cost. There are times when the only source of new notes into supply is via ATMs.

A branch based ATM can easily handle the requirements of personal customers which would have needed 3 cashiers.

A machine is

Yes. The ATM is cheaper by a very very large margin indeed.

No its not. Counters recycle cash. ATMs dont. Counters can hand out any useable note. ATMs only use unissued notes which have to be specially supplied.