ATM fees have long been a sticky topic. For many people, paying an ATM transaction fee is an unwelcome but accepted fact of life.

Who's giving who the money? Photo: Jeff Herbert.

For Indigenous Australians in remote communities however, ATM fees can have a significant impact on their life, swiftly eroding their humble bank balance.

This is the finding of a report released late last year by the feisty Australian Financial Counselling and Credit Reform Association (AFCCRA), titled “ATM Fees in Indigenous Communities”, which focussed on excessive ATM fees in remote communities.

It found that too often, Indigenous people have no choice but to use the single ATM in a remote community.

Most concerning is the exorbitant fees that some “no-name” ATM operators charge. Transaction fees of $2 are common, but some remote communities incur fees up to $5 or $10 per transaction.

Many of these people exist on low incomes and Centrelink payments, checking their balances multiple times on the day a Centrelink payment is due. Needless to say, this quickly eats away at their payment.

The AFCCRA report argued these fees cause further hardship for those who can least afford it.

It was a bold move by AFCCRA who has never shied away from outing exploitation in the financial services sector. At the very least, the report made the Minister for Financial Services and Superannuation Bill Shorten sit up and take notice.

There’s no doubt that for low income earners, ATM fees quickly add up. The reality is that for an unemployed person on a Newstart allowance (which equates to living on $33 per day), it reduces the money they spend on food.

Case studies in AFCCRA’s report reveal that Indigenous consumers are more likely to withdraw small amounts of cash and so incur more fees – sometimes $20 to $40 on the day Centrelink payments are due.

The issue was heightened in 2009 after the Reserve Bank of Australia made sweeping ATM Fee Reforms which inadvertently made the situation worse for remote Indigenous communities.

The Fee Reforms were designed to encourage greater ATM competition by allowing direct charging by ATM owners (many of whom are private operators) and forcing them to compete for business with “other ATMs in the vicinity”.

And there’s the problem: “In the vicinity” works really well if you’re in the big smoke, but it’s a waste of time if you’re in sunny Yuendumu 300km north-west of Alice Springs.

Armed with their new powers some private operators have taken the opportunity to charge like wounded bulls because in the words of Gordon Gekko “greed is good and now it seems it’s legal”.

I’m sure some ATM operators provide a responsible fee for service and, to be fair, these fees will be higher because it is more expensive to operate an ATM in a remote community.

However, access to cash is an important service and I’ve yet to speak to one person who doesn’t want an ATM in their community. It appears the hole in the wall is just as handy in remote Australia as anywhere else. And I’m yet to meet anyone who enjoys being ripped off.

And so I’m uneasy with AFCCRA’s key recommendation from the report: “there should be no charge at all to use an ATM in an Indigenous community”.

If there is no financial incentive for operators, there will be no ATMs in communities. The good, the bad and the ugly will just pack up their gear and leave for more profitable places.

However it is not AFCCRA’s intention to make ATMs extinct in remote communities. What they are saying is “someone else needs to pay the ATM fee for people in remote communities”. 

My concern is that having someone else foot the bill doesn’t address the underlying problem. It doesn’t improve levels of financial literacy and it doesn’t stop the exorbitant fees. It actually has the potential to accelerate both. 

While I’m sure everyone has ideas, one alternative is to consolidate the ATM network into a single financial institution like the no-nonsense Darwin-based Traditional Credit Union (TCU).

With 17 years of successful operations and 11 branches in remote Indigenous communities throughout the Top End, the TCU is a model worth looking at.

The Minister for Indigenous Affairs Jenny Macklin has already allocated $14 million to expand the TCU into each of the 20 targeted growth towns in the Northern Territory.

The funding will train up to 330 Aboriginal people and provide 39 teller positions within these communities. In addition, 9,200 Aboriginal people will for the first time have access to culturally relevant and informed face-to-face banking. 

The way I figure it is that if you’re in for a penny you might as well be in for a pound so why doesn’t the Government just bite the bullet and consolidate the ATM network into one organisation?

With an ATM costing between $60K and $100k each they’re not cheap and so the TCU is unlikely to go on a spending spree without some government support.

And if the government does kick in, the benefits are likely to be many.

First, the TCU’s Board is made up of high calibre traditional elders and Territorians who are unlikely to impose exploitative fees on their communities- at least not if they want to keep their positions.

Second, because it’s a Credit Union any profits will be ploughed back to its members to improve products and services. Essentially, the TCU could reinvest the money where it’s needed most.

And finally, ATM usage could be coupled with over-the-counter services of the TCU’s branches and tellers. Customers could deposit and transfer money and check account balances in addition to withdrawing cash.

It’s a more rounded financial solution for remote communities. 

Interestingly, the TCU already has agreements with Westpac, ANZ and NAB which allow its members to access their ATMs for free, but at the least replacing all the no-name-white-label ATMs in remote communities with TCU ones would likely result in more transparent and accountable ATM fees.

If we’re serious about improving financial services and literacy in Indigenous communities, we need to look at ways to strengthen institutions like the Traditional Credit Union.

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    • TChong says:

      07:05am | 14/03/11

      Glenn -  is this a completely independant article ?, because if it was, I’m sure you could ask why the big banks , including the one you work for, cant / dont/ wont subsidise the ATM fees for remote communities.
      The NAB, like the others , could very easily afford it, the actual numbers involved would be miniscule for the banks, so why doesnt it happen.?
      I hope this isnt just crocodile tears , and a bit of PR from the NABs spokesperson exec.

    • Edward James says:

      08:26am | 14/03/11

      What an interesting photo it graphically displays banks opportunism, not just with the guts of your by line about exploiting captured clients in remote communities. This photo reveals the way banks and other financial instructions have encroached onto our public property to conduct their banking business. There should be more than lip service paid by councils to compliance. The local government act mandates adequate insurance be in place. Who is liable for the public risk insurance here and in so many other places where banking institutions have encroached onto public property by simply installing one or more hole in the wall machines? I expect other businesses which pay a fair market price per square meter for floor space must envy these comfortable arrangements with local government? What do banks pay per square meter in insurance premiums and rent to comply with their license if indeed they all have them, to conduct business on our public footpaths?  Edward James

    • michael j says:

      08:51am | 14/03/11

      Just another example of how rampant capitalism truly works for the ordinary person when restraints are removed,,,,,

    • JPM says:

      02:04pm | 15/03/11

      @michael j - what we’ve got in Australia is NOT capitalism. Call it corporatism, socialism, central planning-ism, whatever…

      You cannot have capitalism without risk; you cannot have capitalism with central banks & legal tender laws.

      Please avoid spouting your ignorance on economics, your disinformation is actually harmful if it convinces another individual.

    • Sludger says:

      08:56am | 14/03/11

      I was uneasy with the way I thought this article was heading - ie more handouts with any assistance - so was pleasantly surprised at the ending.  I do not think it is healthy to the remotore commnities, nor fair to the rest of Australia, to expect the government to just pick up the tab.  The institution you named would seem to be suited, and it would be nice to see a study into this.  Mindy you, Chongy raised a good point too.  Whatever we do, as long as we get away from the welfare, handout mentality that is a good thing.

    • Muttley says:

      07:51am | 16/03/11

      you mean like they have in the US? Yeah, that worked well. Just look at the health care system.

    • NRG says:

      10:42am | 14/03/11

      None of us should pay fees for withdrawing for any ATM. We are getting screwed every which way but loose by these bastards already AND we bailed them out from the GFC.
      First against the wall when the revolution comes.

    • Richard says:

      01:04pm | 14/03/11

      NRG you have not bailed anyone out from the GFC.  The banks have paid a truckload to the government for the guarantee so you have been a net winner.  The total amount of money paid from the government to banks?


      Get your facts straight or STFU.

    • Bruce says:

      04:39pm | 14/03/11

      Sorry NRG. You are wrong. The government did not spend a cent, they just offerred a “catch net” is case of a problem. Reality is that the Australian banks did not need any real support and are some of the strongest banks in the world. They are also one of the biggest tax payers in Australia.

    • JPM says:

      02:12pm | 15/03/11

      Actually Richard you are incorrect, unless assuming the NRG does not have any $AUD (but he is clearly using a computer, so we assume he has money).

      NRG, and indeed the entire population has paid for this bailout; it is paid for every year through the inflation of our money supply by the RBA. This devalues the existing supply of currency, effectively stealing the value of wealth/savings that is stored in Australian dollars. All of this is done without our knowledge or permission. It is legalised theft.

      There is another, more formal name for this insidious thievery: currency debasement. Look up the history of currency and you’ll see that debasement has always ended in collapse.

      You can’t avoid this undeclared tax because of legal laws; we are forced to accept $A as money and we are also forced to pay our taxes in $A, or face criminal prosecution.

      Get your facts straight or STFU slave.

    • David says:

      11:04am | 14/03/11

      And nobody should be asked to subsidise the expenses of living in a remote community. There should be very little call to use an ATM. Use a debit card instead.
      I am sorry but I lived in very remote communities for years. I had to pay extra. I was required to rent (not permitted to buy) and, when I eventually returned to the city, had to borrow from relatives in order to buy because no bank would give me a loan. I have paid it back now but it has meant working eight years past retirement and still having less.
      Why should anyone else do it differently?

    • Ben81 says:

      11:46am | 14/03/11

      Educating people in these communities about the fees in the first place would be a good start.
      I can tell you (because of where I work) that people in remote communities quite often recieve statements from their bank or credit union with page after page of declined transactions and enquiry fees as they continually try to use the ATM while waiting for their money to go through.

    • Jim says:

      12:16pm | 14/03/11

      A couple of things here…the more remote the ATM, the higher it’s operating costs. You have to pay more to the people who convey the cash, more to set them up, possibly higher repair costs as well.

      Second point, what’s stopping an initiative whereby the department of community services and indigenous affairs help set up a group that operates and maintains their own ‘no name’ ATM’s in remote areas? You know the banks will charge more, you know the banks will not hesitate in closing them down if costs get too high, and you know the fees go straight to head office.

      Show some initiative instead of complaining about it!

    • James says:

      01:08pm | 14/03/11

      Why do Aboriginal people receive higher social security benefits on average?

    • fairfair says:

      01:52pm | 14/03/11

      It is an issue of equity over equality. I have no issue in pay scales being determined by need over equality, but I do have an issue when it is racially defined and not needs based.

      It would be difficult to find a job and rent a house when there are no jobs and no houses available to rent. I would rather see the government curb their welfare spending and increase infrastructure funding in these areas. Little tax is being recouped out of these areas though and I am sure city folk would take issue with this. 

      Tony Abbott suggested development of initial employment opportunities like groundskeeping and rubbish collection - but apparently this was seen as racist and demeaning. I saw it as a means of instilling pride for location and a sense of taking responsibility. If I lived in an area of this country that offered little to no opportunity I would gladly pick up rubbish over sit on my dot and do nothing and whoever pulled the race card should be smacked down.

      Education in general is a big thing. Education on financial responsibility is lacking. As Jim says, there are reasons as to why fees are higher and rather than removing the “punishment” for not effectively managing funds, why don’t we try and teach the whole nation how to be a bit more financially responsible irrespective of how they obtain their income.

    • Steve Smith says:

      02:18pm | 14/03/11

      Aboriginal peole do not receive any higher social surcurity benefit as you are falsely claiming in this blog.
      If you have any concrete evidence to suggest that they do, the please feel free to present it in this blog.
      I don’t know where you or others get this mis-information from.

    • fairsfair says:

      02:31pm | 14/03/11

      @Steve Smith - Aboriginals do not receive higher payment on a particular benefit. New Start was given as an example in this article - it is graded the same for all. Aboriginals have more avenues to claim though. IE - there are more payments offered to them that are developed for and aimed solely at assisting Aboriginal and Torres Straight Islanders. As for proof, check out the centrelink website.

      Like I said in my previous post, I am all for equity over equality - sometimes some of us need more to achieve the same as others. Basing something solely on race and developing initiatives in this same vein is not really the best way to go about it though.

    • fairsfair says:

      07:01pm | 14/03/11

      not 100% if this is still the case James, but when when I was in grade 12 and we all sat down to discuss uni prospects, entitlements etc etc - ATSI australians were able to claim Abstudy in addition to Austudy.

    • Trude says:

      02:30pm | 14/03/11

      Why are there ATM charges at all? Do the banks and credit unions really have everyone bamboozled into thinking they COST money? ATMs SAVE banks and credit unions millions of dollars a year. Each ATM is equal to one 24/7 branch office. Now factor in the cost of running a branch office 24/7, building rental, interior decorating, computers, lighting, staff (manager, tellers, cleaners), maintenance & upkeep, etc.

      So how is it that the banks and credit unions have people convinced that ATMs exist for CUSTOMER convenience? So convinced that everyone from the unemployed through to the highest levels of government feel the need to debate what amount is fair for us to pay toward the millions of dollars already being saved by using ATMs rather than branches?

    • fairsfair says:

      02:48pm | 14/03/11

      I agree with the bank owned ones, but the other ones are a business. They are essentially a vending machine and criticising fees is up there with doing your block over someone charging you $2.20 for a Mars bar that you would otherwise get for $1 at Woolies. Thereby they are out to make money and they are placed in convenient locations. Customers are paying for the convenience of using a teller that is not owned by their bank. If you own an 24 hour IGA store and you have a RediTeller in there for the convenience of your customers - you would gag at how much it costs to insure them. They are upwards of $20,000 a pop and are the first thing thieves go for.

    • Kate says:

      02:52pm | 14/03/11

      ‘In the vicinity’ doesn’t work very well in the suburbs either, what with your bank’s machines often not being available, not working or refusing to dispense anything other than $50 notes (seriously WTF, I just love this when I’m down to $49 in my bank account). I can’t imagine how frustrating it must be for those in remote communities. Such a rip-off.


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