Poorest customers barred from using 80 per cent of ATMs
Lloyds, Royal Bank of Scotland and NatWest have announced that they will bar any basic bank customers from using rival banks' ATMs.
The move means those account holders, who are usually the poorest customers and not in a position to pay for fancier accounts, won't be able to use 80 per cent of Britain's cashpoints.
RBS has defended its decision by saying that basic accounts are free to customers but if they use rival cash machines RBS incurs a charge – estimated at 50p – 75p per cash withdrawal.
'It is unsustainable for us to offer free access to other banks' ATMs for basic accounts as we face a charge per bank transaction, which needs to be recovered elsewhere,' says a spokesperson for the bank.
In the coming months customers will be informed if they are affected by the change, which will mean they can only use RBS and NatWest ATMs along with some supermarket cash machines.
Lloyds basic account customers will be in an even worse position as they will be limited to only using Lloyds machines, and they won't even be able to withdraw money from Halifax or Bank of Scotland, which are both owned by Lloyds.
'This change will increase financialexclusion as it leaves basic bank account holders at RBS unable to access around 80 per cent of the free cash machines in the UK,' says Dominic Lindley of Which?.
'These account holders will be inconvenienced and might incur extra costs when travelling to find a cash machine they can use,' he adds.
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Comments
So this fee they are charged by rival banks is no longer negated by their own ATM charges to rival banks? Why not?
If this true, there is another solution. In the US and Canada there is an incentive not to use rival banks' ATM - a small transaction fee of $1.00-£1.50 is charged to use a rival bank. Perhaps inconceivable if you're used to free ATM withdrawals, but at least you're not barred from using other ATMs.
Regulators and consumers' associations are keen to allow clients to switch banks. It is well-known that the average person changes bank less often than spouse.
If banks can no longer profit from customers who should switch to banks offering cheaper services, what else can you expect from banks? To try to exploit the customer when it is present: reduce costs, do more cross-selling of insurance and other products, etc.
This move just seems to me as a different way to compete. The game of attracting customers with temporarily favourable conditions, and then locking them in with e.g. direct debits, and then making profit over the years, is no longer the right one. Here we have a view at the next game.
As much as most people hate banks, the case has not been done in the article for blaming them.
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