Automated banking should mean lower fees, workers' group says

MANILA, Philippines — The automation of bank transactions should mean lower fees and not increased charges for depositors, Partido Manggagawa said Thursday.

Some banks have applied to adjust their ATM transaction services from the current P10-P15 for interbank withdrawals and P2 for interbank balance inquiries, prompting a call for a House inquiry over concerns that the fees could increase to as much as P30 per transaction. 

PM said that technology has allowed ATMs and other systems to replace human tellers, which would mean savings on the banks' labor costs. 

"[T]he more the system is becoming smart and efficient, which is what automation achieves, the more the services become widely available and cheaper, if not free. The banks' plan to impose higher fees on ATM transactions and other charges simply violates the economics of automation," PM Chair Rene Magtubo said.

The Bangko Sentral ng Pilipinas issued a moratorium on fee hikes in 2013, saying that while banks have to recover the costs of putting up and maintaining the machines, the amount and timing of a fee hike should be studied to avoid burdening the consumers. That moratorium has been lifted.

Aside from putting up the ATMs, banks also have to spend on things like electricity, security and even disaster recovery measures so the machines can serve their customers 24/7.

RELATED: ‘Looming’ increase in ATM fees, explained

According to an ANC report, banks seeking approval to adjust their fees—some have asked to lower charges—have cited the rising cost of transporting cash as well as security issues to justify the proposed increases. The report also quotes the BSP as saying it is unlikely that interbank withdrawal charges will reach P30.

But Magtubo attributed the proposed hikes to "corporate greed." He said that "after human tellers were robbed of their jobs, these banks were planning to rob their depositors more to depreciate the robots and to compensate their CEOs."

Magtubo, in an earlier statement, said that the P15 charge for interbank withdrawals is already a burden for depositors.

"Doubling the fee would be onerous on workers receiving their wages through payroll ATM accounts," he said.

ATM fees, explained

The ATM fee is set and charged by the bank that issued the customer’s card.

The ATM fee collected is used by the issuing bank to pay the other banks that accepted its customers’ card-based transactions — also known as “interchange fee” — as well as to cover other costs such as fraud-related losses.

Any difference in the amount of ATM fee and the interchange fee is considered as revenue to the issuing bank and is commonly referred to as “issuer’s fee.”