Consumer advocacy group Laban Konsyumer Inc. (LKI) said the higher fees in the use of ATM (automated teller machines) will benefit big banks and marginalize the small ones.
In a statement, LKI President Victorio Mario Dimagiba questioned and raised concerns on the new Bangko Sentral ng Pilipinas policy that paved the way for higher ATM interbank fees as this means higher cost to depositors.
Banks have sought to increase interbank ATM fees from P10 to P15. Beginning April 7, Bank of the Philippine Islands said non-BPI cardholders who use BPI ATMs will be charged P2 per balance inquiry, and P18 per cash withdrawal.
The fees are higher than the P1.50 balance inquiry and P15 withdrawal fees currently collected from non-BPI cardholders by their respective banks every time they use the Ayala-led bank’s ATMs. Other banks have also announced adjustments in their fees.
First, LKI stressed that the increased fees in the use of ATM add another burden to the ordinary customer. Secondly, LKI said big banks will benefit more and marginalize the small banks.
The consumer group went on and questioned “Is there a real demonstrated need for higher fees? Are there actual improvements/enhancements on the current ATM services, advances in technology or infrastructure that justify the increased fees or the need for them?”
Dimagiba further said that the large branch networks are the ones increasing fees because they see that they are earning more.
He noted that in the distribution of ATM fees in one ATM transaction, the sharing is between the bank that issued the ATM card (issuer bank), the bank whose ATM machine was used to transact (acquirer bank) and the network that connects them (Megalink or Bancnet).
In the old scheme, Dimagiba pointed out that the base is the fee charged by the issuer bank and from this is deducted a fixed amount that goes to the acquirer bank, a fixed amount that goes to the network, and the residual amount goes to the issuer bank.
In the new policy, the base is the fee charged by the acquirer bank, and fixed amounts go to the issuer bank and the network. The residual amount goes to the acquirer bank.”
“The new policy is more beneficial to the banks with large branch networks because of the greater probability of more people using their ATMs since they are more in number. Therefore… they will benefit more from the new sharing formula, and therefore it makes sense to them to increase their fees too,” he said.
LKI raised several points and demanded a response from the sector. “LKI now has to observe those acquiring banks that announced increases in atm fees are the big boys,” he said.
Dimagiba actually explained “I didn't notice Union Bank amongst them. All are members of Megalink and Bancnet and there is mutual and reciprocal connectivity amongst the member banks. So… what happens to that agreement? What is the logic of the acquirer and the issuer bank distinction?”
The consumer group argued that “Are the big banks laying the predicate to depositors to transfer their accounts to them considering they have more ATM machines anywhere. In the same bank, no ATM fees increases for now. This BSP policy is breeding unfair competition to the issuer bank in favor of the acquiring in the long term.”
Dimagiba also went on to reason that “There are no new infrastructure or technology that would warrant recovery of new investments. Or is this another BSP laying the groundwork for banks to consolidate again and strengthen amidst the backlash of the pandemic? Are depositors now encouraged to deposit and withdraw in retail banks versus the issuer bank? These are the consumer questions that must be answered immediately.”
Dimagiba concluded that banks should instead “prioritize in ensuring that depositors develop trust in online commerce payments by strengthening digital privacy, security and eliminate offline downtime for consumer welfare.”