BSP changes rules on ATM fees

by Daxim L. Lucas, Julie M. Aurelio, Philippine Daily Inquirer, 14 Feb 2021

MANILA, Philippines — Do you feel cash machine withdrawal fees are too high? Look around because, starting April 7, automated teller machines (ATM) may charge different rates for the same transaction under new rules approved by the Bangko Sentral ng Pilipinas (BSP).

It does not mean that ATM withdrawal fees will become cheaper because the BSP conceived of the new system precisely to allow banks to “adjust” their cash machine fees after prohibiting increases since 2013.

But the central bank hopes the new system, called “Acquirer-based ATM Fee Charging,” will spur banks to become more competitive in attracting consumer barya (small change) that easily runs into billions every year.

Currently, an ATM cardholder is charged by his own bank the same fee for transacting at the ATMs of other banks.

Under the new system, a bank can set ATM fees for non-customers, while still offering free ATM withdrawal and balance inquiry services to its customers.

“Providing ATM services entails cost, including the counting and transporting of cash and its loading in ATMs, using electricity, providing security and other expenses to operate and maintain said machines,” the BSP said in a statement.

At present, ATM withdrawal fees range from P10-P15 for more than seven years now. By early April, ATM withdrawal fees are expected to range from P10-P18.

“The [new] method is more advantageous to the transacting public as it promotes transparency and empowers consumers to choose the financial institution that satisfies their needs in terms of fees and quality of service,” the central bank said.

The BSP explained that the new pricing method would allow banks that deploy ATMs to be “reasonably compensated” for servicing non-customers, and also incentivizes them to set-up more terminals, which widens the reach of banking services in the country.

But some lawmakers said the new rule would add to the burden of consumers.

Government employees, pensioners and aid beneficiaries will likely bear the cost of increased ATM transaction fees, according to Agusan del Norte Rep. Lawrence Fortun who urged the BSP and Department of Finance to accredit more government depository banks, preferably to include those with more branches and ATMs.

There are five government depository banks: Land Bank of the Philippines, Development Bank of the Philippines, Al-Amanah Islamic Investment Bank, Philippine Postal Bank, and Philippine Veterans Bank.

“All these banks have few branches and ATMs compared to the large private banks,” Fortun said, adding that increasing government depository banks would spare consumers the ATM fee increases announced by private banks.

He noted that state-run Landbank has 406 branches, 63 mini-branches and 2,195 ATMs as of 2019 while BDO Unibank has 1,436 branches and 4,466 ATMs and the Bank of the Philippine Islands has 1,170 branches and 2,822 ATMs.

Makati City Rep. Luis Campos Jr. also appealed to the BSP to defer the hike in ATM fees, amid economic and financial woes that Filipinos face due to the COVID-19 pandemic.

For his part, Senior Citizens Rep. Rodolfo Ordanes said LandBank should help its account holders, which includes pensioners, by shouldering the cost of ATM fees.