On a recent trip to the US (San Francisco), I was surprised by how much ATMs charge. The ATM in my hotel was the lowest I found, charging only $4. Compare this to Europe where in most countries ATMs do not have a fee (small convenience stores are often the exception), and you can use the ATM of a competitor bank without incurring extra fees.
One of the reasons why the cashless society caught on is because there are no transaction fees when people use a bank card. I can go months without using cash.
There are absolutely transaction fees (also called processing fees) involved, but they're usually paid by the merchant. That's why many shopowners usually post required minimum purchase amounts for credit cards (i.e. you must buy $10 or more in order to pay with credit card).
Cash also has handling costs for the merchant, like hiring a money transporter or needing an employee or two to take the money to the bank (presumably during bookable hours)
But those costs are much less than the network fees since they're done in bulk instead of per transaction. Credit card processing fees are ~3%, so for every $1k in sales, you pay ~$30, whereas going to the bank is a fixed cost and merely takes time and can be scheduled when it's cheapest to do. So dealing with cash scales well since it has a fixed cost, whereas credit/debit gets more expensive (compared to cash) as revenue increases.
> On a recent trip to the US (San Francisco), I was surprised by how much ATMs charge. The ATM in my hotel was the lowest I found, charging only $4
If you use your bank's ATM, they won't charge you a fee ( aka waive the fee ). If you use another bank's ATM or a non-bank ATM, then it's highway robbery. So the only time I ever use an ATM is if it had my bank's logo on it.
> Compare this to Europe where in most countries ATMs do not have a fee
Wow. Does this apply even if you use another bank's ATM?
> Wow. Does this apply even if you use another bank's ATM?
It varies but typically ATMs prefer charging the card issuer rather than the customer. So if you're using a bank that doesn't charge when you withdraw money out of its network, then it's essentially free. That's very common with online banks.
The same is true in the US. Ally Bank automatically reimburses fees up to $10/month, and Charles Schwab reimburses without any limit. Each back obviously has its own network and policies for out of network withdrawals, but I can't remember the last time I actually paid an ATM fee (I use Ally Bank).
In my country I can use the ATM of any bank (even competitors) and won't be charged by my bank or the ATM owning bank. It's not a feature on my account, it's just the standard way things work here. It's not reimbursement either (as was mentioned in another thread about the US), they just don't have fees for this.
My last visit to a bank was 8 years ago. I do all my banking online and if I have a problem I write an email (and sometimes call).
The fact that one wants to pay for bank services and agrees on a bank to force them to come (vs having mechanisms for remote access) is something I do not understand.
There is a population which does not have access to Internet, or is computer illiterate. The efforts should go into helping them to learn and legally force banks to make online banking easy.
This is the answer. Who needs a large amount of cash if you’re computer (or phone) literate? Do all of your banking online and use something like CashApp for the rare person to person transfers.
I'm not personally in this category, but I believe that there is a group of people who cannot bank because they're either blacklisted by companies like ChexSystems (which compile lists of people who have overdrawn bank accounts and not paid back the bank) or who have court judgements against them, in which case any money in a bank account just gets seized to pay the judgement.
That’s true - and I didn’t think about that - but, the article also profiled people on social security that get debit cards directly from the government. Do those go through the banking system? Honest question. I don’t know.
Is it? The poorest people are more likely to be primarily cash users, based on what I've read, e.g.:
> "...Seventeen percent of all black households and 14 percent of all Hispanic households had no bank account in 2017, according to a report from the FDIC. Some have poor credit; some work jobs where they’re paid only in cash. Cashlessness isn’t an option for them..."
It seems like the answer then is not to have more private banks but to have postal banking and making it easier for people to have access to bank accounts. They could completely get rid of paper banking. If you pay all your bills electronically via debit cards, the bank and the person/company you are making payments to would know you have the money and reduce the risk of overdrafts.
Right now, the second you use your debit card. It shows up on your account.
There are many, but here is a personal anecdote. For background, I am a relatively high income software professional. Many years ago, I moved states, and in the process had to switch banks, so I closed my old account before moving.
Somewhere there was an automatic debit on one my bills for 30-50 US bucks that my bank paid, but since my account was already closed, it basically went into default. When I tried to open a bank account in my new state, I was denied.
It ends up there’s something like the credit reporting agencies, but for banks, and because of my $50 dollar accidental default, I ended up on this system. There are almost no consumer protections on it, so I couldn’t contest it, and I didn’t have any way to pay it or get it removed.
The end result is that I was unable to open a bank account for the next 5 years without a co-signer, even though my credit score was in the 700s and I had a six figure income. I was able to get credit cards, but couldn’t easily pay the bill without an account to write checks from. I had to go to check cashing places to get money orders (most banks won’t give you money orders or cashiers checks without an account), I had to cash my paychecks at the one office my employers bank had in town, and I could only receive checks for banks I could travel to. When I rented my apartment, I paid the security deposit in cash, but then had to drive around town when I got it back after moving out to try and find a branch of my landlords bank while I was on my way out of town. It was a nightmare.
There’s a whole system I fell into that I wasn’t even aware existed until that happened to me, and I consider myself a highly educated consumer compared to your average person. There are plenty of reasons to want cash in our society, even if you are not doing anything illicit or that you want to keep hidden. If, for any reason, banks are not available to you, life gets very difficult very quickly.
I still don’t see that as a reason for wanting cash - that’s a reason for wanting both laws to make the banking system act more like the credit system with more consumer recourse and “postal banking”. They could go as far as denying access to paper checks and being able to opt out of letting banks get you into overdraft situations by denying all payments that would result in overdraft.
Also, you should be able to decide which order payments go in - highest first or lowest first. Highest first can easily result in 4 small overdrafts instead of 1 large overdraft.
I can't remember the last time I paid an ATM fee, because for many years I've had an account that reimburses them. If you're here and you still pay fees because you didn't know you had a choice, now you know.
Same here but there's incentive to not waste money on fees as my bank also pays a small dividend each year. My workaround was to get cash back when buying groceries but Kroger recently added fees to cash back on purchases!
The Family Dollar has NO CASH BACK!! signs on every terminal because like Kroger they must have discovered razor thin margins aren't sufficient to cover transaction fees. For the same reason the city in the article may discover Dollar Tree has the same attitude about cash back transactions.
Short of government incentives there is no reason for a savings and loan to remain in a small unprofitable town and outside of North Dakota there are no government-owned banks. As much a it goes against the political climate these days you probably do need government regulation and incentives to keep banking accessible to these towns.
What banking services do these people need? Most banks offer mobile check deposit, and many offer a wide network of fee-free ATMs. Most of these ATMs don't take deposits, so that may be an issue for those who need it.
I use Ally Bank and they offer $10 reimbursement for ATM fees every month and they have a wide network of fee-free ATMs (at most 7-11s and a few other common stores). If you look harder, you can find accounts without any limits (e.g. Charles Schwab), and many credit unions support deposits in co-op ATMs (probably not helpful if there aren't any in rural towns). The only reason I go to banks is to withdraw cash in specific denominations for paying our baby sitter, but you can usually get the same thing if you ask nicely at a grocery store.
I don't see much of a reason why people need physical banks anymore. Withdrawals can happen with an ATM, deposits can happen in mobile or mail, and loans are increasingly available online. The only thing I can think of is business owners needing to make deposits and withdrawals frequently.
Welp, I've reached my free article limit from Bloomberg, so I'm working off the title alone.
Last year a spate of articles appeared about how grocery stores had bailed out of small-town/rural America, leaving maybe a Dollar General or something. For years, we've heard about telecom monopolies providing less than realistic service to small-town/rural America. Remember all the hand-wringing over a "digital divide"?
1. Isn't this just market forces at work? Since we're all free market fundamentalists, why does this bother us?
2. This is the result of deregulation, unchecked consolidation, and the populace migrating to cities. Monopolies, or even firms with a lot of monopoly power in oligopolistic markets don't have to meet every need, they just need to keep turning what they consider as an obscene profit. This strikes me as a 2nd order effect of allowing banks to consolidate.
3. Small and medium towns are losing population as well, and may be on the bubble for this sort of thing as well.
4. There's certainly an outsized amount of hand-wringing over the fate of rural America. I'm going to guess that there are urban areas with vastly greater population, that have much the same problems. Don't we usually agree that 15% of Americans are un-banked? This seems like an "electoral college" for concern about rural Americans.
Literally everything about this post isn't just wrong, it's like 180 degrees away from the truth.
Far from 'outsized amount of hand-wringing over the fate of rural America' the truth is rural America has been somewhere between ignored to outright attacked for the past 50 years. 99.9% of social justice efforts have been focused on the inner-city, targeting the problems of poverty, crime, drugs, discrimination facing those group while completely ignoring the poverty, discrimination and drug abuse of rural America until we realized the rural opioid epidemic is worse today than the urban crack epidemic of the 80s.
Far from being a result of deregulation, our economy is so over-regulated that only the mega-corps with armies of staff dedicated to compliance can stay in business, pushing all the smaller competition out of the market.
A more accurate summary would be: "After 50 years of regulation consolidating power in a handful of urban areas, while only providing social services and affirmative action for the urban poor, the people who live outside of those areas have suffered on both ends of the spectrum"
Free article limit? Anyone can get around these limits. For example by blocking certain types of javascript--with something like the advanced mode of Ublock Origin.
As for my situation I live in a town of 300 people--with a bank branch but no ATMs anywhere.
23 comments
[ 3.0 ms ] story [ 64.6 ms ] threadThere are absolutely transaction fees (also called processing fees) involved, but they're usually paid by the merchant. That's why many shopowners usually post required minimum purchase amounts for credit cards (i.e. you must buy $10 or more in order to pay with credit card).
If you use your bank's ATM, they won't charge you a fee ( aka waive the fee ). If you use another bank's ATM or a non-bank ATM, then it's highway robbery. So the only time I ever use an ATM is if it had my bank's logo on it.
> Compare this to Europe where in most countries ATMs do not have a fee
Wow. Does this apply even if you use another bank's ATM?
It varies but typically ATMs prefer charging the card issuer rather than the customer. So if you're using a bank that doesn't charge when you withdraw money out of its network, then it's essentially free. That's very common with online banks.
The fact that one wants to pay for bank services and agrees on a bank to force them to come (vs having mechanisms for remote access) is something I do not understand.
There is a population which does not have access to Internet, or is computer illiterate. The efforts should go into helping them to learn and legally force banks to make online banking easy.
I think it’s fear of the unknown for many.
Is it? The poorest people are more likely to be primarily cash users, based on what I've read, e.g.:
> "...Seventeen percent of all black households and 14 percent of all Hispanic households had no bank account in 2017, according to a report from the FDIC. Some have poor credit; some work jobs where they’re paid only in cash. Cashlessness isn’t an option for them..."
From https://www.theatlantic.com/technology/archive/2018/12/cashl...
Right now, the second you use your debit card. It shows up on your account.
Somewhere there was an automatic debit on one my bills for 30-50 US bucks that my bank paid, but since my account was already closed, it basically went into default. When I tried to open a bank account in my new state, I was denied.
It ends up there’s something like the credit reporting agencies, but for banks, and because of my $50 dollar accidental default, I ended up on this system. There are almost no consumer protections on it, so I couldn’t contest it, and I didn’t have any way to pay it or get it removed.
The end result is that I was unable to open a bank account for the next 5 years without a co-signer, even though my credit score was in the 700s and I had a six figure income. I was able to get credit cards, but couldn’t easily pay the bill without an account to write checks from. I had to go to check cashing places to get money orders (most banks won’t give you money orders or cashiers checks without an account), I had to cash my paychecks at the one office my employers bank had in town, and I could only receive checks for banks I could travel to. When I rented my apartment, I paid the security deposit in cash, but then had to drive around town when I got it back after moving out to try and find a branch of my landlords bank while I was on my way out of town. It was a nightmare.
There’s a whole system I fell into that I wasn’t even aware existed until that happened to me, and I consider myself a highly educated consumer compared to your average person. There are plenty of reasons to want cash in our society, even if you are not doing anything illicit or that you want to keep hidden. If, for any reason, banks are not available to you, life gets very difficult very quickly.
Also, you should be able to decide which order payments go in - highest first or lowest first. Highest first can easily result in 4 small overdrafts instead of 1 large overdraft.
The Family Dollar has NO CASH BACK!! signs on every terminal because like Kroger they must have discovered razor thin margins aren't sufficient to cover transaction fees. For the same reason the city in the article may discover Dollar Tree has the same attitude about cash back transactions.
Short of government incentives there is no reason for a savings and loan to remain in a small unprofitable town and outside of North Dakota there are no government-owned banks. As much a it goes against the political climate these days you probably do need government regulation and incentives to keep banking accessible to these towns.
I use Ally Bank and they offer $10 reimbursement for ATM fees every month and they have a wide network of fee-free ATMs (at most 7-11s and a few other common stores). If you look harder, you can find accounts without any limits (e.g. Charles Schwab), and many credit unions support deposits in co-op ATMs (probably not helpful if there aren't any in rural towns). The only reason I go to banks is to withdraw cash in specific denominations for paying our baby sitter, but you can usually get the same thing if you ask nicely at a grocery store.
I don't see much of a reason why people need physical banks anymore. Withdrawals can happen with an ATM, deposits can happen in mobile or mail, and loans are increasingly available online. The only thing I can think of is business owners needing to make deposits and withdrawals frequently.
Last year a spate of articles appeared about how grocery stores had bailed out of small-town/rural America, leaving maybe a Dollar General or something. For years, we've heard about telecom monopolies providing less than realistic service to small-town/rural America. Remember all the hand-wringing over a "digital divide"?
1. Isn't this just market forces at work? Since we're all free market fundamentalists, why does this bother us? 2. This is the result of deregulation, unchecked consolidation, and the populace migrating to cities. Monopolies, or even firms with a lot of monopoly power in oligopolistic markets don't have to meet every need, they just need to keep turning what they consider as an obscene profit. This strikes me as a 2nd order effect of allowing banks to consolidate. 3. Small and medium towns are losing population as well, and may be on the bubble for this sort of thing as well. 4. There's certainly an outsized amount of hand-wringing over the fate of rural America. I'm going to guess that there are urban areas with vastly greater population, that have much the same problems. Don't we usually agree that 15% of Americans are un-banked? This seems like an "electoral college" for concern about rural Americans.
Far from 'outsized amount of hand-wringing over the fate of rural America' the truth is rural America has been somewhere between ignored to outright attacked for the past 50 years. 99.9% of social justice efforts have been focused on the inner-city, targeting the problems of poverty, crime, drugs, discrimination facing those group while completely ignoring the poverty, discrimination and drug abuse of rural America until we realized the rural opioid epidemic is worse today than the urban crack epidemic of the 80s.
Far from being a result of deregulation, our economy is so over-regulated that only the mega-corps with armies of staff dedicated to compliance can stay in business, pushing all the smaller competition out of the market.
A more accurate summary would be: "After 50 years of regulation consolidating power in a handful of urban areas, while only providing social services and affirmative action for the urban poor, the people who live outside of those areas have suffered on both ends of the spectrum"
As for my situation I live in a town of 300 people--with a bank branch but no ATMs anywhere.