ATM transactions to cost you more? The Confederation of ATM Industry (CATMI) has approached the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) to request an increase in the interchange fee paid by customers for cash withdrawals at ATMs.
CATMI is seeking to raise the fee to a maximum of Rs 23 per transaction, in order to ensure more funding commitment for the business.The interchange fee is the charge paid by the card-issuing bank to the bank where the card is used to withdraw cash.
Presently, banks offer their savings bank account holders a minimum of five free transactions per month in the six metro cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi. For any other bank’s ATM, three transactions are free.
Stanley Johnson, executive director of AGS Transact Technologies, an ATM manufacturer, told ET, the interchange rate was increased two years ago. Johnson said that they have been in contact with the RBI, which seems supportive of further adjustments. CATMI has requested an increase to Rs 21, while some other ATM manufacturers have proposed raising the fee to Rs 23.
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He added, “The last time, it took several years to hike this but I feel everyone is aligned and it’s only a matter of time before the (fee) increase will happen.”
In 2021, the interchange fee on ATM transactions was raised from Rs 15 to Rs 17. Additionally, the cap on the fee that can be charged to the customer was increased from Rs 20 to Rs 21 per transaction.
Another ATM manufacturer was quoted as saying, “There has been heavy lobbying across for increasing the interchange rate. A representation has been sent through NPCI and banks have also agreed for a rate increase.” The manufacturer added, “The increase in the interchange fee is a decision taken by the NPCI because the rate is fixed by them.”
CATMI is seeking to raise the fee to a maximum of Rs 23 per transaction, in order to ensure more funding commitment for the business.The interchange fee is the charge paid by the card-issuing bank to the bank where the card is used to withdraw cash.
Presently, banks offer their savings bank account holders a minimum of five free transactions per month in the six metro cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi. For any other bank’s ATM, three transactions are free.
Stanley Johnson, executive director of AGS Transact Technologies, an ATM manufacturer, told ET, the interchange rate was increased two years ago. Johnson said that they have been in contact with the RBI, which seems supportive of further adjustments. CATMI has requested an increase to Rs 21, while some other ATM manufacturers have proposed raising the fee to Rs 23.
Also Read | Home Loan Money Saving Tip: How to repay a Rs 50 lakh home loan in less than 10 years
He added, “The last time, it took several years to hike this but I feel everyone is aligned and it’s only a matter of time before the (fee) increase will happen.”
In 2021, the interchange fee on ATM transactions was raised from Rs 15 to Rs 17. Additionally, the cap on the fee that can be charged to the customer was increased from Rs 20 to Rs 21 per transaction.
Another ATM manufacturer was quoted as saying, “There has been heavy lobbying across for increasing the interchange rate. A representation has been sent through NPCI and banks have also agreed for a rate increase.” The manufacturer added, “The increase in the interchange fee is a decision taken by the NPCI because the rate is fixed by them.”