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Business Models and Pricing Strategies in the Market for ATM Withdrawals

Author

Listed:
  • Guerino Ardizzi

    (Bank of Italy, DG for Payments & Market Infrastructures)

  • Massimiliano Cologgi

    (Bank of Italy, DG for Payments & Market Infrastructures
    Bank for International Settlements)

Abstract

Automated Teller Machines (ATMs) play a crucial role in retail banking as they represent the primary cash access points for customers. However, the ongoing digitalization of retail payments has put pressure on the ATM industry, raising concerns about its sustainability. We describe the main business models adopted in Europe by ATM service providers, with a focus on their pricing strategies and profitability. We then estimate the price elasticity of the demand for cash withdrawals with a partial adjustment model using data on a panel of Italian banks from 2015 to 2020. Our results show that an increase in disloyalty fees would reduce withdrawals from other banks, leaving the overall demand essentially unchanged. This outcome may reflect a potential shift of consumers towards withdrawals from their own bank as well as cheaper alternative distribution channels.

Suggested Citation

  • Guerino Ardizzi & Massimiliano Cologgi, 2025. "Business Models and Pricing Strategies in the Market for ATM Withdrawals," Journal of Financial Services Research, Springer;Western Finance Association, vol. 68(2), pages 283-309, October.
    • Handle: RePEc:kap:jfsres:v:68:y:2025:i:2:d:10.1007_s10693-025-00443-3
    DOI: 10.1007/s10693-025-00443-3
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    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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