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

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  • Donze, Jocelyn
  • Dubec, Isabelle

Abstract

In Australia, on the 3rd of March 2009, the interchange fees on shared ATM transactions were removed and replaced by fees directly set and received by the ATM owners. We develop a model to study how the entry of independent ATM deployers (IADs) aspects welfare under this direct charging scheme. Paradoxically, we show that the IAD entry benefits banks. It may be good for consumers if they sufficiently value the associated growth of the ATM network.

Suggested Citation

  • Donze, Jocelyn & Dubec, Isabelle, 2010. "ATM Direct Charging Reform: the Effect of Independent Deployers on Welfare," TSE Working Papers 10-162, Toulouse School of Economics (TSE).
  • Handle: RePEc:tse:wpaper:22718
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    References listed on IDEAS

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    1. Donze, Jocelyn & Dubec, Isabelle, 2008. "Paying for ATM usage : good for consumers, bad for banks ?," MPRA Paper 10892, University Library of Munich, Germany.
    2. Knittel, Christopher R. & Stango, Victor, 2011. "Strategic incompatibility in ATM markets," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2627-2636, October.
    3. 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.
    4. Matutes, Carmen & Padilla, A. Jorge, 1994. "Shared ATM networks and banking competition," European Economic Review, Elsevier, vol. 38(5), pages 1113-1138, May.
    5. 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.
    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. Brendan Filipovski & Darren Flood, 2010. "Reform of the ATM System - One Year On," RBA Bulletin, Reserve Bank of Australia, pages 37-45, June.
    8. 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.
    9. Nadia Massoud & Dan Bernhardt, 2002. ""Rip-Off" ATM Surcharges," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 96-115, Spring.
    10. 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.
    11. 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).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Tobias Wenzel, 2014. "Independent Service Operators in ATM Markets," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(1), pages 26-47, February.
    2. 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.
    3. Wenzel Tobias, 2013. "Naive Consumers, Banking Competition, and ATM Pricing," Review of Network Economics, De Gruyter, vol. 12(3), pages 271-286, October.
    4. 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.
    5. Magnac, Thierry, 2015. "Foreign fees and customers'cash withdrawals," TSE Working Papers 15-560, Toulouse School of Economics (TSE).
    6. 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.
    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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