ATM transaction fees at out-of-network ATMs are at an all-time high, as some banks charge more than $5 per transaction in major cities.
According to a survey by Bankrate, American banks charge $4.77 per transaction, on average, on out-of-network ATMs, 4 cents more than the national average of 2023 and the highest since the financial company started collecting data in 1988.
Talking about these rising fees, Bankrate’s chief financial expert Greg McBride stated both your own bank and the ATM owner receive part of the fees you pay while doing transactions at an out-of-network ATM. Out of the current national average of $4.77, $1.58 goes to your home bank, while the ATM owner receives the remaining $3.19.
The exact fee you will be charged depends upon the city where you live. For instance, the fee is $5.37, the highest in the country, in Atlanta, while the average fee in San Diego, Cleveland, Phoenix, and Detroit is also more than $5 per transaction. The company found that the $4.16 fee in Boston is the least among all the areas surveyed.
Bankrate recommends two options to Americans to avoid such fees on every ATM transaction: either to withdraw your cash from your own bank or use the cash back option to get instant money while paying through a debit card. The latter option, however, comes with its own restrictions, as the maximum withdrawal limit is much lower than what you can withdraw from the ATMs.
McBride stated that the declining use of ATM machines is one of the reasons behind the rising costs of out-of-network ATM transactions.
Banks have to keep their profits maintained while also covering the costs of operating the ATM machines, which is forcing them to burden their existing customers as previous ones stop using their facilities.
This decline can majorly be attributed to the rise in online banking and the popularity of digital payment networks like PayPal, ApplePay, GooglePay, and Zelle. While the number of ATM users in the USA has been declining since 2010, the arrival of the pandemic in 2020 contributed to significant decline in in-person banking services as more people started relying on online payments. This has also resulted in banks closing their different ATMs.
The situation is not isolated to the United States, as other countries like the United Kingdom and Ireland have also seen a major decline in ATM facilities.
