Network consolidation to minimize ATM fees

CEBU, Philippines – The expected cut in automated teller machine fees as a result of the ATM network consolidation could soon benefit customers, but a bank official said the reduction may not be that significant.

Cebu Bankers Club President Gino Gonzalez said the network merger could only mean a decrease in ATM service fees but not the removal of them. Though he could not say how much will be the reduction.

At present, ATM cardholders are charged of fees when doing inter-bank transactions such as withdrawal or balance inquiry.

That means when cardholders use the ATM of other bank, they have to pay as much as P2.50 for balance inquiry and P15 for withdrawal.

Gonzalez explained in an interview that the issuer bank -- the bank that issued the ATM card -- determines and charges the fees.

"Ma-reduce lang ang fees because banks [also spend] for operational costs," he said, citing operating expenses such as machine maintenance, cash delivery, rental fees in off-site places, etc. He added it is a legitimate need for banks to recover the costs of operations.

The official, however, said that even now clients are not charged with any fee for using another network's ATM.

Normally, bank clients are not charged when withdrawing money from their own bank's ATM unit.

Last January 30, a deal to merge the country's two major ATM networks Megalink and BancNet was signed, with the latter as the surviving entity of the unification. The consolidation is expected to be realized in about a year's time.

Benefits to clients

The bank official also explained the consolidation will also result to faster resolution of complaints involving another bank's ATM. More ATMs will be able to service inter-bank transactions.

"ATM cardholders can pay their bills through more ATMs," information note provided by CBC stated. "At present, an ATM cardholder can pay bills only through the ATMs of his bank's network and not of the other network."

"The customers of former Megalink banks will also be able to pay more institutions which include billers currently not available in Megalink," it said.

For banks

Once Megalink member banks join BancNet, they will have access to the latter's services and facilities such as its online payment gateway, e-Gov payment platform and point-of-sale cash-out. POS is a place where retail transaction is completed.

"They will also benefit from cross-border transactions facilitated by BancNet's interconnection with the US network NYCE and Korean network KFTC," said the noted whose information came from BancNet.

Holders of foreign-issued cards such as Visa and MasterCard can also get cash from their ATMs.

For corporate clients

Using BancNet's e-Gov facility, former Megalink banks can allow their corporate clients file and pay taxes to the Bureau of Internal Revenue, submit reports and remit their employees' SSS contributions and loan amortizations and PhilHealth and Pag-IBIG contributions online.

Gonzalez said this convenience will save the time and resources of clients.

The note further stated: "Importer/exporter clients of former Megalink banks will be able to pay trade-related fees to the government agencies through the Philippines' National Single Window of which BancNet is the payment gateway."

If the two networks are combined, there are a total of 16,431 ATMs installed across the country as of end-2014 from just around 6,200 units in 2005.

The Philippines has an expanded ATM cardholder base of 67.6 million as of Dec. 31, 2014.