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Atm Surcharges: Effects On Deployment And Welfare

Author

Listed:
  • Ramón Faulí-Oller

    (Universidad de Alicante)

  • Ioana Chioveanu

    (Universidad de Alicante)

  • Joel Sandonís

    (Universidad de Alicante)

  • Juana Santamaria-Garcia

    (Universidad de Alicante)

Abstract

This paper analyzes the effects of ATM surcharges on deployment and welfare, in a model where banks compete for ATM and banking services. Foreign fees, surcharges and the interchange fee are endogenously determined. We find that, when the interchange fee is cooperatively fixed by banks to maximize joint profits, surcharges should be allowed, as they neutralize the collusive effect of the interchange fee. As a consequence, ATM deployment is higher and retail prices lower than without surcharges, increasing consumer surplus and social welfare.

Suggested Citation

  • Ramón Faulí-Oller & Ioana Chioveanu & Joel Sandonís & Juana Santamaria-Garcia, 2007. "Atm Surcharges: Effects On Deployment And Welfare," Working Papers. Serie AD 2007-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2007-12
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    Citations

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    Cited by:

    1. 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.
    2. repec:bdi:wptemi:misp_023_22 is not listed on IDEAS
    3. Stijn Ferrari, 2010. "Discriminatory fees, coordination and investment in shared ATM networks," Working Paper Research 184, National Bank of Belgium.
    4. Stijn Ferrari & Frank Verboven & Hans Degryse, 2010. "Investment and Usage of New Technologies: Evidence from a Shared ATM Network," American Economic Review, American Economic Association, vol. 100(3), pages 1046-1079, June.
    5. Tobias Wenzel, 2014. "Independent Service Operators in ATM Markets," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(1), pages 26-47, February.
    6. 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.
    7. 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.
    8. Górka, Jakub, . "Rozwój sieci bankomatów w Polsce a opłaty interchange i surchange," Gospodarka Narodowa-The Polish Journal of Economics, Szkoła Główna Handlowa w Warszawie / SGH Warsaw School of Economics, vol. 2011(7-8).
    9. Wenzel Tobias, 2013. "Naive Consumers, Banking Competition, and ATM Pricing," Review of Network Economics, De Gruyter, vol. 12(3), pages 271-286, October.
    10. Jakub Górka, 2011. "Rozwój sieci bankomatów w Polsce a opłaty interchange i surchange," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 7-8, pages 89-112.
    11. Ioana Chioveanu & Ramon Fauli‐Oller & Joel Sandonis & Juana Santamaria, 2009. "Atm Surcharges: Effects On Deployment And Welfare," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 613-635, September.
    12. Markkula, Tuomas & Takalo, Tuomas, 2021. "Competition and regulation in the Finnish ATM industry," BoF Economics Review 8/2021, Bank of Finland.
    13. Pedro I. González Ramírez & Leobardo Plata Pérez, 2015. "Análisis teórico de las modificaciones a la regulación de comisiones interbancarias en cajeros automáticos en México," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 30(1), pages 141-178.

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    Keywords

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    JEL classification:

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

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