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ATM reforms must deliver savings and must be fair.

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Senator Stephen Conroy

Deputy Opposition Leader in the Senate Shadow Minister for Finance, Small Business & Financial Services

4th March 2003

ATM Reforms Must Deliver Savings and Must Be Fair

Labor would not support any reforms of ATM services that:

æ Did not reduce the overall cost of banking to customers

æ Slugged customers in regional areas with higher fees than charged in the city

æ Hit customers of smaller financial institutions with higher charges than others.

Under the model proposed by the banks, interchange fees on ATM transactions would be cut to zero and be replaced by a direct charge to customers.

The RBA and ACCC noted in their “Study of Interchange Fees and Access” in October 2000, that interchange fees on ATMs of around $1.00 represented a “substantial” 100% mark-up on the 50 cent cost to financial institutions to deliver such services.

If ATM services are to be unbundled and charges levied directly on customers, other bank charges and the overall cost of banking services must fall.

Moreover, any proposed direct ATM charge must reflect the true cost of providing ATM services.

Finally, any proposed model must ensure that customers in regional areas and customers of smaller financial institutions are not exploited.

There is no justification for customers in rural and regional areas being hit with higher charges that people in the cities for using ATMs.

Equally, there is no justification for a different charges being levied on the customers of smaller financial institutions. Such differential pricing would threaten competition.

Further information: Stephen Conroy: 0418 383 965 Jane McGill: 0402 11 22 55