Higher ATM fees loom

MANILA, Philippines — Philippine banks are set to implement the acquirer-based fees for ATM transactions starting April, resulting in higher charges for cardholders who transact in the network of other banks.

The local banking industry is set to implement the acquirer-based ATM fee charging (ABFC) method starting April 7, wherein the fees charged to a cardholder for a withdrawal transaction or balance inquiry will  be based on the fees of the other banks or ATM owners.

Ayala-led Bank of the Philippine Islands said its clients could still use their BPI debit cards on BPI ATMs free of charge.

“BPI clients can continue to use their BPI debit cards on BPI ATMs at no cost,” the bank said in an advisory.

However, the bank said fees would be charged if clients use local non-BPI ATMs via BancNet.

“The withdrawal fee shall be automatically added to the amount withdrawn. The balance inquiry fee will be shown as a separate debit amount which will be reflected in your statement of account on the day the transaction was made,” BPI said.

Effective April 7, BPI said it would charge other bank’s cardholders using BPI ATMs P18 for every cash withdrawal, or 20 percent higher than the current charge of P15 per transaction.

Likewise, the Ayala-led bank would also charge P2 for every balance inquiry or 33 percent higher than the current P1.50 fee.

In April 2018, the Bangko Sentral ng Pilipinas (BSP) lifted a moratorium on ATM fees imposed in September 2013 under Memorandum M-2013-044, which maintained a status quo in terms of both service fees and connectivity arrangements.

The memo also called for the adoption of an acquirer-based charging method wherein the amount to be charged to a cardholder shall vary depending on the ATM terminal being used.

The new method allows ATM owners to directly compete for business with one another by disclosing fees and offering lower charges than other ATMs in the vicinity.

Under the previous issuer-based method, the fee is set and charged by the issuing bank and the amount charged to the cardholder remains the same regardless of who the ATM acquiring bank is.

The BSP issued Memorandum 2019-020 reminding BSP-supervised financial institutions to adhere to the principles of reasonable and market-based pricing in setting their ATM fees.

The regulator earlier gave several banks the green light to raise fees imposed on ATM services by only P3 per transaction despite requests by some institutions to raise the charges by as much as P18 per transaction.

ATM fees charged by banks ranged between P11 and P15 per transaction and the charges only apply if a bank client uses an ATM that is not owned by his or her bank.

Banks noted a sharp drop in ATM transactions due to mobility restrictions when Luzon was placed under enhanced community quarantine in mid- March last year to slow the spread of COVID-19.

The stay-at-home directive of the government prompted a major shift in behavior as consumers now prefer to transact via digital and electronic channels.

BSP Governor Benjamin Diokno earlier reported a surge in electronic transactions last year given the community quarantines imposed to curb the spread of the virus.

Electronic cash transfers via PESONet surged by 376 percent to 15.3 million in terms of volume and 188 percent to P951.6 billion in terms of value.

Likewise, the volume of low value fund transfers via InstaPay rose by a dramatic 459 percent to 86.7 million, while the value surged 340 percent to P463.4 billion.