Bankers Prepare To Hike Atm Fees Fee Imposition Will Begin In April, Particularly In Vacation Areas

Using your bank’s automatic teller machines, one of the few free bank services left, may soon cost you if banks take advantage of new rules.

Most of the nation’s banks can begin imposing fees at ATMs beginning in April as a result of a decision last month by Visa International, a bank association that sets rules for ATMs.

The first place consumers might notice the charges is while on vacation. Banks want to charge fees at ATMs located in tourist areas.

Visa did not set a maximum fee that could be charged but said it expects banks to charge between 25 cents and $2.50 per transaction.

Most institutions only charge customers for using ATMs owned by another bank. Few charge for their own ATMs because they want to encourage customers to use machines for routine transactions rather than turning to tellers, a more expensive service.

But that could be changing. Banks lobbied Visa to lift its ban on ATM surcharges because they want to levy fees at ATMs located in hotels and resorts, convention centers and turnpike rest stops. These ATMs are convenient to customers but expensive for banks, said Visa.

“Our members have told us that they don’t feel they can operate certain ATMs cost effectively,” said Susan Forman, a Visa spokeswoman.

But the new policy applies to all ATMs in Visa’s Plus network, which encompasses most of the nation’s 100,000 machines. About 38,000 machines are located off bank premises in places like supermarkets and hotels, according to Bank Network News, a Chicago trade publication.

Forman said the change was also an acknowledgment that more states are allowing banks to charge for ATM transactions. At the urging of local banks, fourteen states have lifted bans on ATM fees several within the last year - and several more have legislation pending.

“We felt it was becoming inevitable,” said Forman. Banks that impose fees will have to put up signs at ATMs, put a message on ATM screens and allow customers to cancel the transaction, she said.

MasterCard, which operates the Cirrus ATM network, still bans the charges, but is reviewing the policy.

The change comes as fees for everything from bounced checks to telephone inquiries are on the rise. One bank, First Chicago Corp., is even charging some customers to use live tellers.

Banks say they have to raise fees to offset the cost of maintaining branches and providing 24-hour customer service lines.

Whether they’ll begin imposing ATM fees is up to each individual institution, said Forman.

Banks said its too early to tell if they’ll start charging.

“We have to study it and put it in the context of our pricing strategy,” said Ellen Stewart, a spokeswoman for Chemical Banking Corp., the nation’s third-largest bank. Chemical, which operates about 1,200 ATMs in New York, New Jersey and Texas, will form the biggest U.S. bank when it merges next year with Chase Manhattan Corp.

Maria Mendler, a spokeswoman for Citicorp, which recently got rid of all fees for ATMs, computer banking and other electronic services, said the bank hasn’t yet studied the new policy.

Some bankers that already charge the fees say they doubt institutions will make people pay for using ATMs at traditional locations.

“It’s highly improbable, because they want to encourage people to use their machines,” said Stan Paur, president of Pulse EFT Association, which operates 8,000 ATMs in the Southwest. “Our research shows that people place high value on being able to bank anywhere, anytime.”

Pulse allows banks to impose surcharges on their ATMs. Most charge around 50 cents per transaction, but the machines are programmed to tell consumers about the fee and allow them to cancel the transaction.

About 75 percent of all Pulse ATM users avoid the fee by going to another machine, said Paur.