Collecting ATM Fee: Why so serious?

Since March 1^st, a new law which allows banks to collect fee from ATM interbank transaction will come into practice. Before the new law, banks are not able to charge their customers for transaction from their own ATM.  However, the new policy has raised many negative reactions from the public. Why do people complain about that? And are they making sense?

Lots of comments on the law express a desire to know why banks still charge fee while their money at bank account receives only a very low interest rate. They compare their current account with the deposit account which receives much higher rate and then state that they have already paid the transaction fee through the low rate of their account. It is true that the current account always have a lower interest rate than deposit accounts. But that does not mean the customers do not have to pay for the service they use. The ultimate rule in economics goes “there is no free lunch”. Since the birth of personal property, people have always looked for a safe place to hide their property. They have used boxes and anything which has a hole and a lock. They have buried money in their garden or put it in the roof top. Now, we have a better way to keep our money safe: banks. We deposit our money into our bank account and are freed from the fear that one day a theft will make us a beggar. We can withdraw our money at any moment. We do not need to carry lots of cash and instead use a small well-protected plastic card to pay for our purchasing. We can do all that due to our bank. And we still demand them to pay more money for us and supply service for free? Put ourselves in a bank’s shoes and consider whether such demand is fair. In Vietnam, however, banks still pay for our current account in order to encourage people to stop using cash. In contrast, in other developed countries, such as America, current accounts do not receive any interest rate because it is against the law. Therefore, to attract more customers, those banks provide many free services, such as ATM transactions. So, your call: Interest rate or 1,000VND [$0.05] for each occasional transaction? I am not rich man. I am kind of poor instead. But I still have to wonder what we can do with 1,000VND these days?

There are many comments about the fact that ATM system is too bad and therefore banks do not deserve to collect the fee. I myself experience some frustration when I try to withdraw money from the ATM. But to say that the whole system is too bad is not completely true. There are moments that the system does not work well due to some reason such as overloading, … There are some banks that do not have strong ATM systems. Sometimes, I passed by lots of ATM though I was in need of withdrawing money because they were not from my bank. I was afraid of being overcharged. Due to the new policy, all banks are now in one price standard. Now, there are only 2 kinds of ATMs: my bank’s ATM and others. And I can know how much I will be charged. The new policy will connect the whole system, which will make it better and therefore, deserve the payment. Moreover, fee will actually help to improve the system, at least better than when the banks do not collect it.

Perhaps people have not carefully looked at the new policy. The new policy only regulates the cap price, which means the maximum fee that a bank can charge us, not the floor price. Banks can still choose not to charge. They can apply any price in the range from 0VND to 3,000VND. If you are not satisfied with your bank’s fee policy, just turn to other banks. Of course, at first, there will hardly be any banks which have a lower fee than others. However, competition will make banks run a race to reduce their fee in order to attract more customers. Some people may not be able to change their bank because their boss uses it to pay their salary. But think again and further, why does the boss keep using the bad banks? There must be some benefits for both him and the company that they are working for.

Since I study economics and banking, sometimes I have small lesson for the new comers. Always before my lesson about banking, I asked them about their reasons to choose a bank. The answers usually were safety (in the first place), interest rate (in the second place) and convenience (in the third place). There was little concern about the ATM fee.  Now we are exaggerating the whole thing. Some people have already declared to stop using ATM and instead turn to bank service at big buildings which can take much more time. It is their choice and therefore we cannot say whether they are right or wrong to do that. However, to me, I would be very appreciated if they do that. Now that less people use the ATM, the whole system will get smoother. I will enjoy a better service and perhaps even get a job, because the demand for banking tellers is rising.

And good luck waiting at the chair. You’d better go to the bank early to have a good number.

Kz