ATM fees – 100% margin? Seriously?

For as many times as I’ve agonized in front of the ATM staring at the screen describing the fee I’m about to be charged, and asking me if I wish to continue, it never hit me until yesterday how truly insane these are, and how many loan sharks must be envious at the gross profit generated from these fees.

So, first the freshman finance refresher.  Gross profit equals revenue minus cost of goods sold divided by revenue.  Right?  Well, I’m putting it out there.  Show me the costs.  There are none.  Ok, so I’m paying for convenience?  What does it cost the bank to provide me convenience?  I can walk into the bank.  See a live person.  Maybe get a lollipop.   And do my business for free.  That business?  Giving the bank my money so they can loan it out and make more money.

But, if I go to the ATM, the magic box that allows the bank to be open fewer hours, hire and pay less tellers and have fewer branches, I’m saving the bank money.  And for that, I get the privilege of paying two bucks.  Or, if its four bucks, I cancel the transaction and end up taking out more money so I lower the effective rate of the fee.  I shouldn’t have to think that hard when I just need some cash for lunch.

So, who’s really providing whom the service?  Maybe the bank should pay me each time I use the ATM.

Happy Thanksgiving!  I thank you all for stopping by.


  1. I, too, agonize over this. And now I'm pondering ending my 15 year relationship with the uber-national bank pending relocation into a market where uber-national bank somehow does not have much saturation. All because I can't stand to think of paying their exorbitant ATM fees to continue banking with them.

  2. It's pure folly that we put up with this, Barry, I agree! I'm making the move to a credit union.

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