Commonwealth Bank of Australia (CBA) subsidiary, BankWest, is charging its customers a 50 cent disloyalty fee when they use another financial institution’s automatic teller machine (ATM) under the new-direct charge fee regime.

BankWest spokesman Adrian Bradley said the fee applied to all products except Zero Account, and would not apply when customers used CBA ATMs.

“The fee was set in relation to the costs we’re incurring,” he said.

Mr Bradley said it was inappropriate to engage in a debate with the Reserve Bank of Australia (RBA) over the appropriate fee per transaction.

BankWest, CBA, as well as ANZ Banking Group and Westpac are now charging customers of other institutions $2 for the use of their ATMs.

NAB’s direct charge for non-NAB customers is $1.50 for a cash withdrawal or advance, and 50 cents for a balance enquiry.

Under the RBA’s new regime that came into effect on Tuesday, an ATM owner can charge the customer directly for the use of the machine but must disclose the fee prior to the transaction, RBA governor Glenn Stevens told the House of Representatives Standing Committee on Economics last month.

“But the only cost to a cardholder’s bank associated with use of a foreign ATM is the cost of processing the transaction electronically - a matter of no more than 10 cents,” he said.

BankWest has dropped its fee for foreign ATM usage from $1.95 to 50 cents a transaction and said a fee would no longer apply for denied transactions.

CBA added BankWest’ 800 ATMs to CBA’s 3,300-strong ATM fleet - the largest network operated by an Australian bank - after completing its $2.1 billion acquisition of BankWest and St Andrew’s Australia from HBOS Australia in December.

CBA and ANZ Banking Group have dropped the $2 fee previously applied to their own customers when they use a foreign ATM.

Although BankWest was a wholly owned subsidiary of CBA, it operated separate cost and fee structures as a standalone business, Mr Bradley said.
National Australia Bank, Westpac and St George charge their customers 50 cents and 25 cents respectively each time they use a foreign ATM.

Westpac and St George together have 2,800 ATMs in their network, while ANZ has 2,500, and NAB has 1,650 ATMs.

AAP