It’s not a large number, only 11 of the state’s more than 1,100 banks and thrifts.
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Beginning Thursday, however, those 11, which operate less than 5 percent of the automated teller machines statewide, can impose a surcharge on transactions by non-customers trying to obtain money from their accounts in another bank.
The fees likely would start out small, at $1 or less, and not all these banks will go ahead and levy them. But if these initial programs work–that is, if the public does not rise up in protest–more banks likely will follow and impose fees, too.
The next group may come in mid-September, when eight Downstate banks, which use the EFT Illinois Inc. ATM network, also will become eligible to start surcharging. Those eight banks operate 50 ATMs.
For now, the names of all 11 banks aren’t known. Stephen Cole, president of Cash Station Inc., the ATM network serving the Chicago metropolitan area, declined to identify the institutions that sought clearance to begin imposing the charge.
Cash Station has about 4,600 machines in its network, while EFT has about 1,800 machines.
The movement to surcharge is being propelled by the Cirrus and Plus ATM networks, owned by MasterCard International and Visa USA, respectively, which began permitting surcharges on their machines in April.
Already, many banks charge their own customers a fee, typically $1, for using another bank’s ATM. The surcharge, by the owner of the machine, would be on top of any existing fee.
But just because a bank filed an application to begin surcharging doesn’t mean it will.
“We had no desire to charge, but we made an application just in case,” said Diane Beukelman, marketing director for Merchants National Bank of Aurora, which operates six ATMs at the Hollywood Casino in Aurora.
But Beukelman said Merchants National decided it won’t impose a surcharge, at least for now, after it talked it over with casino officials.
“If we ever go to a charge, it doesn’t mean we will charge everywhere,” she said, noting that banks likely wouldn’t surcharge at low-traffic neighborhood ATMs, but could at high-traffic locations, such as a riverboat casino.
Merchants National’s decision against a surcharge dovetails with plans made by most of the state’s banks and thrift institutions.
For many banks, however, it’s a difficult decision. On one hand, they’re being pressured to produce more fee income, the kind that comes from an ATM. But they don’t want to antagonize customers by being the first to impose an ATM surcharge.
Thomas Wells, chairman and chief executive officer of Elk Grove Village-based First American Bank, said the surcharges are “reasonable” because they allow banks to operate low-volume ATMs.
But First National Bank of Chicago last summer found out the perils of imposing fees when it decided to charge a $3 fee for some customers using tellers. After being subjected to criticism, it is now providing cover for many banks adopting similar fees.
Rules adopted by Illinois’ ATM networks require banks imposing a surcharge to prominently warn patrons.