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ATM Direct Charging Reform: the Effect of Independent Deployers on Welfare

Author

Listed:
  • Donze Jocelyn

    (Toulouse School of Economics (Gremaq))

  • Dubec Isabelle

    (Toulouse School of Economics (Gremaq))

Abstract

In Australia, interchange fees on shared ATM transactions have been recently removed and replaced by usage fees directly set and received by ATM owners. We develop a model to study how entry of independent ATM deployers (IADs) affects welfare under the direct charging scheme. We show that paradoxically, IAD entry benefits banks. Entry benefits consumers when they strongly value the associated growth of the ATM network.

Suggested Citation

  • Donze Jocelyn & Dubec Isabelle, 2011. "ATM Direct Charging Reform: the Effect of Independent Deployers on Welfare," Review of Network Economics, De Gruyter, vol. 10(2), pages 1-23, June.
  • Handle: RePEc:bpj:rneart:v:10:y:2011:i:2:n:3
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    References listed on IDEAS

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    1. Donze, Jocelyn & Dubec, Isabelle, 2010. "The effects of regulating interchange fees at cost on the ATM market," Economics Letters, Elsevier, vol. 107(2), pages 187-189, May.
    2. Nadia Massoud & Dan Bernhardt, 2002. ""Rip-Off" ATM Surcharges," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 96-115, Spring.
    3. Matutes, Carmen & Padilla, A. Jorge, 1994. "Shared ATM networks and banking competition," European Economic Review, Elsevier, vol. 38(5), pages 1113-1138, May.
    4. Mcandrews James J., 2003. "Automated Teller Machine Network Pricing - A Review of the Literature," Review of Network Economics, De Gruyter, vol. 2(2), pages 1-13, June.
    5. Donze, Jocelyn & Dubec, Isabelle, 2008. "Paying for ATM usage : good for consumers, bad for banks ?," MPRA Paper 10892, University Library of Munich, Germany.
    6. Donze, Jocelyn & Dubec, Isabelle, 2006. "The role of interchange fees in ATM networks," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 29-43, January.
    7. Jocelyn Donze & Isabelle Dubec, 2009. "PAYING FOR ATM USAGE: GOOD FOR CONSUMERS, BAD FOR BANKS? -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 583-612, September.
    8. Knittel, Christopher R. & Stango, Victor, 2011. "Strategic incompatibility in ATM markets," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2627-2636, October.
    9. Ioana Chioveanu & Ramon Fauli-Oller & Joel Sandonis & Juana Santamaria, 2009. "ATM SURCHARGES: EFFECTS ON DEPLOYMENT AND WELFARE -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 613-635, September.
    10. Brendan Filipovski & Darren Flood, 2010. "Reform of the ATM System - One Year On," RBA Bulletin, Reserve Bank of Australia, pages 37-45, June.
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    Citations

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    Cited by:

    1. Kopsakangas-Savolainen Maria & Takalo Tuomas, 2014. "Competition Before Sunset: The Case of the Finnish ATM Market," Review of Network Economics, De Gruyter, vol. 13(1), pages 1-33, March.
    2. Magnac, Thierry, 2015. "Foreign fees and customers'cash withdrawals," TSE Working Papers 15-560, Toulouse School of Economics (TSE).
    3. Donze, Jocelyn & Dubec, Isabelle, 2009. "La tarification des retraits aux distributeurs automatiques bancaires, une revue de la littérature
      [ATM withdrawal pricing, a survey of the literature]
      ," MPRA Paper 16546, University Library of Munich, Germany.
    4. Tobias Wenzel, 2014. "Independent Service Operators in ATM Markets," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(1), pages 26-47, February.
    5. Wenzel Tobias, 2013. "Naive Consumers, Banking Competition, and ATM Pricing," Review of Network Economics, De Gruyter, vol. 12(3), pages 271-286, October.
    6. Clare Noone, 2012. "ATM Fees, Pricing and Consumer Behaviour: An Analysis of ATM Network Reform in Australia," RBA Research Discussion Papers rdp2012-03, Reserve Bank of Australia.
    7. Magnac, Thierry, 2017. "ATM foreign fees and cash withdrawals," Journal of Banking & Finance, Elsevier, vol. 78(C), pages 117-129.

    More about this item

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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