JPMorgan Has Found Consumer Breaking Point for ATM Fees

JPMorgan Has Found Consumer Breaking Point for ATM Fees

Banks are constantly trying to add fees to accounts. The greatest and most prevalent are ATM fees. However JPMorgan found the consumer breaking point.

Retail banks have constantly been adding fees to accounts to boost revenue in recent years. There have been regulations put in place, like the fact one must opt in for overdraft protection, but that still has not stopped them from adding non regulated fees. Some have minimum balances, some charge per transactions and most charge for use of ATMs.

In fact, according to the Wall Street Journal in 2010, banks made an aggregate $7.1 billion from ATM fees. So, faced with the prospect of losing billions from the new interchange fee regulations in the Dodd-Frank financial reform bill, some banks, like JPMorgan Chase began to test the limits of consumer tolerance.

JPMorgan Chase had tested both $4 and $5 ATM fees in Illinois and Texas respectively beginning in March 2011. Of the 16,000 ATMs that the company has, approximately 20% reside in those two states. On Monday May 2 it was officially announced that this program would cease and return to the previous fee amount of $3.

Banks continue to maintain the agreement that ATM networks are costly to maintain and difficult to build. However, due to the advent of the debit and credit card they are being used less frequently. Moreover, consumers often are unaware that not only are they being charged from the issuing bank, their own bank may add a fee for the out-of-network access to their money as well.

It seems that the $4 and $5 ATM fee issue is tabled for the moment. However, it seems very possible that we'll see this level again as banks continue to look for ways to generate income lost from bank regulation of overdrafts and debit card interchange fees.


Comments

  • Bryan Thompson

    May 04, 2011

    That is a bit ridiculous. Good to know they have come to their senses for the moment.

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