ATM fees

[madmax]

So what are your thoughts?

Jim Flaherty still barking up the wrong tree?

Or is it an election ploy?

http://thechronicleherald.ca/Business/563061.html

ATM fees here to stay, Scotiabank CEO says

Bid to scrap charges rejected

By ALISON AULD The Canadian Press

Bank of Nova Scotia will not get rid of automated banking machine fees despite growing political calls for their elimination, CEO Rick Waugh said Tuesday as he announced a record first-quarter profit of more than $1 billion.

Waugh rebuffed overtures from the federal government to do away with the fees just a day after Finance Minister Jim Flaherty met with officials from the country’s six top banks to urge them to address the issue.

"One way or another, people pay for banking services they use and that’s the way we have to run a very profitable bank," Waugh said in a news conference that focused almost entirely on fees levied on clients for transactions conducted at other banks’ machines.

"The only way we can remain profitable is to generate revenue, and the only way we can generate revenue is through customers

[Charles Anthony]

Buy stocks in some of the major banks.

There is an active thread started recently that discusses this issue:

The Fed Gov't and Banks., The hypocrisy of the opposition.

[stevoh]

The only way we can remain profitable is to generate revenue, and the only way we can generate revenue is through customers

Thats innaccurate. It should actually read, the only way we can continue to increase profits is by continuing to charge the customers more for the same services or create new services.

I think I hear more complaints about banking fees now than gas prices, and I am getting tired of them. I even have a "no fee bank account" that I can withdraw money from or pay for purchases from, but when I use another bank, a fee is charged. And as I discovered over christmas, if I use interac more than 20 times on this account, I get charged a buck a transaction for each one, even using my own bank! So, in many cases I got charged a fee twice for one purchase. Lame.

However, this is a capitalistic democracy, so I can use my freedom to choose another bank, not surprisingly a local credit union, that gives me unlimited withdrawels on a new account. As long as there is "choice" in our banking, we can make those choices.

But give me a break, poor banks trying to remain profitable, as if. Its not that they are about to slip into the red any moment without banking fees, its that they are continually trying to INCREASE profits, so must continually increase fees or find new ways to charge consumers more money.

[madmax]

Thats innaccurate. It should actually read, the only way we can continue to increase profits is by continuing to charge the customers more for the same services or create new services.

There has been a few threads on ATM fees and peoples opinions positive or negative regarding the banks and their needs.

This Bank has told Flaherty and the Conservatives to go away.

So are you saying that Flaherty should put more pressure on them?

Or the Banks are correct and the Conservatives should just ignore what's going on?

[Renegade]

Thats innaccurate. It should actually read, the only way we can continue to increase profits is by continuing to charge the customers more for the same services or create new services.

Not true. The bank can also increase profitability is by reducing costs. If it were precluded from generating additional free revenue, it could iincrease profitibility by decreasing costs of the ATM channel. I can do that by reducing the numeber of ATMs or by restricting access to its own customers.

[Renegade]

So are you saying that Flaherty should put more pressure on them?

Yes he should. Not because he will get anywhere, but because it is a good political ploy to be seen as attacking the "big bad banks".

Or the Banks are correct and the Conservatives should just ignore what's going on?

People choose what they want to pay for. It is not a surprise that they are charged for another banks ATM. ATM fees have got much more notice because of "white-label" non-bank ATMs. These ATMs charge much larger fees than Banks. Sometimes $4.50 a transaction. They have replaced Bank ATMs in prime locations because white-laberlers have offered to pay floor-space rental to merchants who host the machine. Banks refuse to do so, and have been relegated to their own facilites.

The implication of forcing a bank to reduce or elimnate ATM fees are:

1. The revenue will be generated elsewhere through higher other fees, lower account interest, or higher loan interest. All of these are worse options for the cusotmer.

2. The bank will reduce future investment in the ATM channel and may close some ATM locations.

3. The bank may choose to restrict access. It makes no sense to give its competitors customers access to its infrastructure. You will possibly see the emergence of a for-pay banking plan, which gives you access to other ATMs, and without with you have no access.

All of this to say, the government, Conservative, NDP, or whomever, are best off leaving things alone.

[stevoh]

Not true. The bank can also increase profitability is by reducing costs. If it were precluded from generating additional free revenue, it could iincrease profitibility by decreasing costs of the ATM channel. I can do that by reducing the numeber of ATMs or by restricting access to its own customers.

True, that is another method of increasing profitability. But considering that the original purpose for developing, supporting, and encouraging the use of ATM's was to reduce the cost of multiple brick and mortar locations, along with the accompanying salaries, it all gets a bit much really. This endless quest for greater and greater profits means the banks are endlessly attempting to either reduce costs or increase the amount of money they take from consumers.

And who ends up paying more and having less? The consumers. Luckily, as stated before, competition and free choice can compensate for that with thinking consumers.

Consumers would certainly appreciate it if the bank could find other ways of increasing profits that aren't of off our backs. Like solid investment, for example. Or efficiencies that do not decrease consumer convenience, as ATMs were supposed to do (24/7 access to your money).

So are you saying that Flaherty should put more pressure on them?

Or the Banks are correct and the Conservatives should just ignore what's going on?

I feel that as long as I have reasonable choice in the banking establishment I choose, then I don't agree with government intervention. However, if that choice is removed or limited by collusion, then of course the government should step in. The free market must function as such. New banks should be able to compete.

But I do feel its an effective political ploy. Most people I know are annoyed by these fees.

[Renegade]

But considering that the original purpose for developing, supporting, and encouraging the use of ATM's was to reduce the cost of multiple brick and mortar locations, along with the accompanying salaries, it all gets a bit much really.

Yes, but that turned out to be wrong. Overall, branches were not closed and there are more branches than ever. Customers got an additional channel to access services they never had before. It seems logical that they pay for it if they want to use it.

This endless quest for greater and greater profits means the banks are endlessly attempting to either reduce costs or increase the amount of money they take from consumers.

There is noting wrong with that. Their shareholders demand it, as they should. Same is true for any for-profit industry.

And who ends up paying more and having less? The consumers. Luckily, as stated before, competition and free choice can compensate for that with thinking consumers.

The consumer has the choice, but chooses not to go. Why? Because either they value the brand supplied by the Banks, or the transition costs outweight the inconvieince of fees. Either way, it is easier for the consumer to moan and complain for the government to act, instead of acting for themselves.

Consumers would certainly appreciate it if the bank could find other ways of increasing profits that aren't of off our backs. Like solid investment, for example.

Ultimately the bank's business relies on the consumer (both business and retail) to generate revenue. Investment involves risk and are gambles. Sometimes they pay off, many times they don't. Most of the bank's shareholders are conservative by nature, want to bank to undertake low-risk endevours.

There are other ways the bank can make money other than getting it from the customer, but I doubt the customer would accept it. For example, the bank can pepper you with 3rd party ads in the ATM and online channel. It could sell your information to 3rd parties to be marketed to.

Or efficiencies that do not decrease consumer convenience, as ATMs were supposed to do (24/7 access to your money).

Unfortunately, it would seem that for many reasons, society doesn't let that happen. ATMs were supposed to close branches, but customers reacted unexpectedly. Instead of transferring use to efficient channels, they increased the volume of their banking interactions and used multiple channels. Further, communities started complaining about the loss of jobs and branches, as the bricks and mortar structures closed. Ultimately, if we want an extensive channel infrastructure, we ought to be willing to accept the cost, or move to a more efficient competitor.

[Wilber]

I was in Home Depot a couple of weeks ago. There were two guys at the till in front of me. One had something large and paid for it. The other one grabs a chocolate bar from a little rack beside the till and whips out his debit card to pay for it. Who knows whether he had to pay a fee but you see this more and more. No wonder the banks are making a killing. I love my bank stocks.

[guyser]

I was in Home Depot a couple of weeks ago. There were two guys at the till in front of me. One had something large and paid for it. The other one grabs a chocolate bar from a little rack beside the till and whips out his debit card to pay for it. Who knows whether he had to pay a fee but you see this more and more. No wonder the banks are making a killing. I love my bank stocks.

Well there you go.

I dont like bank fees anymore than than anyone else. They suck and the bank is making a killing from them , thus making a killing for the CEO and all shareholders. So, use them and pay or be smarter and reduce how often you use them. It is our choice.

My one bank complaint has been the application of cheques vs amount on account. This happened years ago, when I was younger and poorer. (come to think of it....I wonder if true)

Anyhow, I had a cheque going through. . I had enough money to pay the cheque. I could have proved that to the bank, the same bank I dealt with since I was 13. (lots of years)

So what did they do? They added up all service charges, and then realized that there would be a shortfall on their services charges by almost two whole dollars. So they charged me service fees first and bounced the cheque. Then they charged me the fee for an NSF cheque.

I dont love banks except for the stock .

[Wilber]

So what did they do? They added up all service charges, and then realized that there would be a shortfall on their services charges by almost two whole dollars. So they charged me service fees first and bounced the cheque. Then they charged me the fee for an NSF cheque.

I dont love banks except for the stock .

They would have only done that to me once. They wouldn't get a second chance.

[stevoh]

Unfortunately, it would seem that for many reasons, society doesn't let that happen. ATMs were supposed to close branches, but customers reacted unexpectedly. Instead of transferring use to efficient channels, they increased the volume of their banking interactions and used multiple channels. Further, communities started complaining about the loss of jobs and branches, as the bricks and mortar structures closed. Ultimately, if we want an extensive channel infrastructure, we ought to be willing to accept the cost, or move to a more efficient competitor.

I can't find any statistics that show the number of brick and mortar locations per customer for today vs say, 20 years ago when ATMs were just getting started. I do know that many smaller communities have had banks closed and replaced with ATM's from experience when I was younger, and in the city I live, many smaller local banks have closed in favour of having a large central location with and multiple distributed ATMs. But that is knowledge based soley on my experience, so can hardly be taken as overall fact.

I honestly believe that this rediculous notion of reducing service because we cannot continue to INCREASE profits at record rates if the government steps in is going to cause the banks more headaches than they would desire. It creates openings for smaller banks that make money the old fashioned way, through lending. And, its not like they will ever say "thats enough profit", those fees will continue to increase to a critical mass where finally a majority of customers will say "enough", and banks will be forced to look elsewhere.

The reducing services threat is hollow, as it reduces the customer base. Banks will never do that. It makes no sense. I mean, I would love to walk up to my boss and say, since I am not able to increase my salary at a reasonable rate, I am instead going to reduce the amount of service I will provide you, but its not going to happen. I would be out of a job.

Same goes for banks. If they try and reduce the number of locations and overall convenience to customers of their various banking services in efforts to increase profit, customers will simply go elsewhere.

Banks threatening to reduce services if an ATM fee restriction is placed by the government will never happen, as it will reduce customer base. Its a false threat.

[August1991]

However, this is a capitalistic democracy, so I can use my freedom to choose another bank, not surprisingly a local credit union, that gives me unlimited withdrawels on a new account. As long as there is "choice" in our banking, we can make those choices.

Precisely. The last thing we need is for the federal government to micro-manage the way banks charge fees.

[madmax]

However, this is a capitalistic democracy, so I can use my freedom to choose another bank, not surprisingly a local credit union, that gives me unlimited withdrawels on a new account. As long as there is "choice" in our banking, we can make those choices.

Precisely. The last thing we need is for the federal government to micro-manage the way banks charge fees.

You believe the Conservative Government and Finance Minister Flaherty are wrong.

[madmax]

I was in Home Depot a couple of weeks ago. There were two guys at the till in front of me. One had something large and paid for it. The other one grabs a chocolate bar from a little rack beside the till and whips out his debit card to pay for it. Who knows whether he had to pay a fee but you see this more and more. No wonder the banks are making a killing. I love my bank stocks.

I think I should have made this one a poll.

You too disagree with Flaherty.

So do you believe this is an election gimmick?

[geoffrey]

You believe the Conservative Government and Finance Minister Flaherty are wrong.

I do.

[madmax]

I dont like bank fees anymore than than anyone else. They suck and the bank is making a killing from them , thus making a killing for the CEO and all shareholders. So, use them and pay or be smarter and reduce how often you use them. It is our choice.

You say you hate them, and we have "choice".

So is Flaherty wrong?

or

Is this an election gimmick?

[geoffrey]

Is this an election gimmick?

There you go. Flaherty is (hopefully) smarter than to be serious about this.

[madmax]

Is this an election gimmick?

There you go. Flaherty is (hopefully) smarter than to be serious about this.

Flaherty brought this up earlier, and there was a discussion on this forum. So I was surprised to see him follow through with this and meet the banks, thus bringing the issue up again.

I do notice a split in peoples opinions on this.

But the reasons are pretty varied as we saw in the discussions in the other thread a few months back.

[Renegade]

The reducing services threat is hollow, as it reduces the customer base. Banks will never do that. It makes no sense. I mean, I would love to walk up to my boss and say, since I am not able to increase my salary at a reasonable rate, I am instead going to reduce the amount of service I will provide you, but its not going to happen. I would be out of a job.

Same goes for banks. If they try and reduce the number of locations and overall convenience to customers of their various banking services in efforts to increase profit, customers will simply go elsewhere.

You are quite wrong. The way in which they will reduce services is by providing a more cost effective alternative and then charging for the original service, forcing customers to choose between a higher fee or the alternative. They have already done this. Once there was no such thing as a transaction limit or inactivity fee, now you have one virtually everywhere. Passbooks have been eliminated. Pretty soon paper statements will go or be charged for. If not reductions in services, then what are they? Yet banks continue to retain customers and continue to be profitable.

[guyser]

I thought I would throw a little story in here on how I screw with the banks.

Being an insurance broker, the banks are always calling looking for a copy of customer X's policy.

I will look in my client screen and see if it was mailed before and if they lost it. I asked them where the copy from date X went? Oh we cannot find it.

So I tell her (it usually is a she) ok I will send one out , but I need to collect $20 (sometimes I say $30) before I send it.

She will always ask why?

For the same reason you charged me for a lost statement. Dont like it do you? Tough, want a copy ..?...send me money.

Click.

[blueblood]

I thought I would throw a little story in here on how I screw with the banks.

Being an insurance broker, the banks are always calling looking for a copy of customer X's policy.

I will look in my client screen and see if it was mailed before and if they lost it. I asked them where the copy from date X went? Oh we cannot find it.

So I tell her (it usually is a she) ok I will send one out , but I need to collect $20 (sometimes I say $30) before I send it.

She will always ask why?

For the same reason you charged me for a lost statement. Dont like it do you? Tough, want a copy ..?...send me money.

Click.

ha ha ha ha ha ha ha nicely done.

[PolyNewbie]

The Money Masters

If Flaherty wasn't already in the banks pockets he would not hold a position in a mainstream party.

[noahbody]

I thought I would throw a little story in here on how I screw with the banks.

Being an insurance broker, the banks are always calling looking for a copy of customer X's policy.

I will look in my client screen and see if it was mailed before and if they lost it. I asked them where the copy from date X went? Oh we cannot find it.

So I tell her (it usually is a she) ok I will send one out , but I need to collect $20 (sometimes I say $30) before I send it.

She will always ask why?

For the same reason you charged me for a lost statement. Dont like it do you? Tough, want a copy ..?...send me money.

Click.

President's Choice bank doesn't charge account fees or atm fees for its customers. Everyone in Canada should switch their account overnight just to see if the other banks have a sudden change of heart. My guess is they will.

[madmax]

The Money Masters

If Flaherty wasn't already in the banks pockets he would not hold a position in a mainstream party.

I can always count on you for the conspiracy angle.