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Sick of paying ATM fees? Collect them instead

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Courtney Trenwith

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ATM fees under fire

Consumer watchdog Choice spokesperson Ingrid Just speaks to 4BC about scrapping a two dollar ATM fee for checking your balance.

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If you can't beat them, join them.

That's what at least two southeast Queensland businessmen have done in the fight against ATM fees.

They have bought their own ATMs and set them up in competition with banks, turning the fee-guzzling machines into their own personal cash cows.

A growing number of entrepreneurs are turning ATMs into their own personal cash cows.

A growing number of entrepreneurs are turning ATMs into their own personal cash cows. Photo: Kirk Gilmour

According to Australia Institute, a growing number of entrepreneurs have latched onto the investment opportunity since Reserve Bank reforms in March 2009 transferred the power to set ATM charges from banks to ATM operators.

"It's a growth market because it's so profitable now to own and run ATMs, which wasn't profitable in the past," Australia Institute deputy director Josh Fear said.

"In the past it was really profitable for banks to have their customers using foreign ATMs. Now it's really profitably for anyone who owns an ATM."

Mr Fear said ATM users still paid a similar amount in fees - $750 million per year, according a report yesterday - but a much smaller share ended up with the banks.

The fee is now mostly split between the ATM operator, which is responsible for maintenance, and the business where it is located.

Brisbane businessman Andrew Mooney has built up a portfolio of about 200 ATMs, with 90 per cent operating in Queensland.

His business, STB Technologies, has significantly grown since the 2009 reforms, compared to when he bought his first ATM in 1995.

He now has four employees and is generating a "comfortable" profit.

"We compete directly against banks but at least we're on a level playing field," he said.

However, he said there was a risk associated with choosing a profitable location.

He has been copping a loss on scores of ATMs across southern Brisbane and in Ipswich since last month's floods. Many were either damaged or the businesses where they are located have not reopened.

Complete ATM Services owner Rod Collins said he relocated from Sydney to the Gold Coast two years ago when he recognised that the high number of card users in southeast Queensland were not being sufficiently serviced.

He now has 40 ATMs located in restaurants, convenience stores and other small businesses across the region and also has contracts to provide temporary ATMs at weekend markets, sporting events and festivals such as Big Day Out.

"At the end of the day it's not about how many machines you have [but] how many transactions you're processing through the machines," he said.

He also has moved into selling machines to family-owned businesses that want to operate them from their premises.

Mr Collins said he was now in such a strong market position he could afford to undercut new competitors.

One of the largest ATM deployers in Australia, Adelaide-based My ATM, recently listed on the Australian Stock Exchange.

Managing director Tim Scala said the company had machines at 650 sites nationally and had sold more than 1500 to investors who purchased fleets of five or 10.

He said wealthy property owners who wanted a better return on their money were investing in ATMs. He offered them a return rate of a minimum 20 per cent per annum.

However, while some ATM deployers offer lease agreements and sell individual machines, financial experts warn that the boom in private ATM owners has seen competition tighten so far that the opportunity had become too risky for "mum and dad" investors.

"There's a secondary market that's developed where you can invest in an ATM," Mr Fear said. "But it's disturbing that such a market exists and I'd suggest it's not in the public interest."

Mr Mooney said operating ATMs should be considered a career move rather than an investment opportunity.

10 comments so far

  • Australia: the world's highest house prices, wealthiest banks, most profitable mines, and proud owners of 20 per cent of the world's gaming machines. And now, let's-get-rich-quick "entrepreneurs" owning ATMs per se. Not bad for a nation with a piddly 23 million people, or 0.33 per cent of the world's population.

    Banks should never have introduced ATM fees in the first place. After all, ATMs save banks money on labour, and secondly, monies merely lying in one's account are in the banks' possession without banks necessarily paying interest - money with which banks can do as they please. How obscenely parasitic.

    Shades of the shady, thieving characters that entered this continent in the first place during the convict days.

    Has much changed?

    Commenter
    Quonishant
    Date and time
    February 17, 2011, 8:46PM
    • It's easy to avoid these fees if you manage your finances - stay aware of how much cash you have, how much you're likely to need and withdraw before you run out. Paying these fees is a choice people make.

      Commenter
      James
      Location
      Brisbane
      Date and time
      February 18, 2011, 12:39PM
      • Aren't ATM Fees really just a penalty for lazy dolts?

        Why do people believe that others should always subsidise THEIR convenience?

        Commenter
        DC
        Location
        Melbourne
        Date and time
        February 18, 2011, 1:56PM
        • these vultures get nothing from me. I am extremely disciplined to ensure i never ever pay their stealthy ripoff $2. I find it outrageous that OFT will regulate short term money lenders for charging 10% per day, yet withdrawing $20 at your average fee gouging ATM will cost you 10% minimum. Some ATM owners ramp the fee at night in pubs etc to take advantage of people too tipsy to know or care.
          Yep, the Australian government and states are the biggest failure and make mexico look positively sophisticated and legitimate in their dealings. Down with our political trash now!

          Commenter
          Vultures
          Location
          QLD
          Date and time
          February 18, 2011, 2:19PM
          • Beautifully said, @Quonishant.

            Commenter
            Baffe
            Date and time
            February 18, 2011, 4:12PM
            • Calm down folks. The fee is to use a teller machine at a bank where you don't have an account, not your own. Do you expect every convenience in life for nothing?

              Commenter
              Ted
              Location
              Melbourne
              Date and time
              February 18, 2011, 4:24PM
              • most foreign atms (non bank branded) now charge 2.50 per transaction. This is up 0.50c - of this, 1.65 goes to the business that houses the ATM and 0.85c goes to the ATM operator. On the reserve bank website submissions estimated each transaction costs 0.14c to process - why are we charged 2.50???

                Commenter
                bambam
                Date and time
                February 18, 2011, 11:09PM
                • Gosh, James, you sound like a barrel of laughs. How fun it must be to plan out your entire week's spendings and withdraw the perfect amount of cash to see you through without ever having to go to a foreign ATM!

                  For those of us in the real world meanwhile.........the charges are an absolute joke and need to be looked at seriously by some government or watchdog agency. Some ATMs are now charging $2.50. I try as hard as possible now to only use my bank's ATMs but its not always easy, sometimes getting charged close to $15-20 a week on something that costs them next to nothing.

                  Commenter
                  Joe
                  Date and time
                  February 19, 2011, 2:34AM
                  • don't pay ATM fees, get an ING card. Easy

                    Commenter
                    leeland
                    Date and time
                    February 19, 2011, 6:05AM
                    • Yes, TED. That's why its call technology! It really doesn't waste them (the bank) anytime or effort.

                      I could understand the efforts required with a teller but not machines! Nothing but numbers crunching and effortless. So yes it must be FREE, otherwise why bother inventing them!!!

                      Satisfying people is one of the first requirement of any product/services design. If this isn't a requirement, don't get involve into any businesses!!

                      Commenter
                      Gerson
                      Location
                      Sydney
                      Date and time
                      February 19, 2011, 10:12AM

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