Consumer Behavior and ATM Surcharge Spikes

It happened with gasoline, it happens all the time with your cable bill and now it's happening (again) with ATM surcharges. Several major banks recently announced plans to increase the fees they charge non-customers when using their ATMs.Earlier this October, Synergistics Research released a study called The Risk vs. Reward of ATM Surcharging. The figures showed that of the nearly 750 consumers polled, 65 percent said they would only use their bank's ATMs; 18 percent said they would use ATMs less; and 6 percent said they would change banks. Overall, according to William McCracken, Synergistics' CEO, the findings reveal that "consumers are resistant to ATM surcharging and may change their behavior in response to increased surcharges. Providers need to develop ATM pricing strategies based on an understanding of consumer resistance and behavior."

What's next? Will banks start charging for online banking and e-bill pay? Most have gone to a free model. It's what people have grown accustomed to over the past decade. But will the battle for more fee revenue make banks think twice about free Internet banking?

And what about mobile banking, for that matter? In this country, we're only now really seeing the vanguard of mobile banking/payments offerings. As banks settle more on an operating model and as consumers grow more comfortable with the concept, the adoption of m-banking will surely take off. But what about pricing there? Will banks charge for it? They do in other countries, like Korea, according to an analyst I heard give a talk at a conference several months ago. And people do pay for the service-because they want it.

But is the ATM channel different? People need access to cash, even with the movement toward electronic payments. We all know that feeling when we need cab fare and the only ATM nearby belongs to some bank we've never even heard of! But we bite the bullet and pay the $1.50 or $2.00 surcharge because we have to. However, what happens when that fee goes up to $3.00 or $4.00? Will people take the time to look for an in-network ATM? I'm guessing they will, to a point. I think in the end, it will be just like what's happening at the gas pump. We complain and moan about $3.00 gas but we still pay for it-because we have to.

Thank goodness for those merchants who let you get cash back at the point of sale when you use a card. We might be seeing more cases of people buying a $0.70 pack of gum so they can get the $50 they needed without paying Bank X $4.00 for the service!It happened with gasoline, it happens all the time with your cable bill and now it's happening (again) with ATM surcharges. Several major banks recently announced plans to increase the fees they charge non-customers when using their ATMs. So what's next?