Donze, Jocelyn and Dubec, Isabelle (2008): Paying for ATM usage : good for consumers, bad for banks ?
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We compare the effects of the three most common ATM pricing regimes on consumers’ welfare and banks’ profits. We consider cases where the ATM usage is free, where customers pay a foreign fee to their bank and where they pay a foreign fee and a surcharge. Paradoxically, when banks set an additional fee profits are decreased. Besides, consumers’ welfare is higher when ATM usage is not free. Surcharges enhance ATM deployment so that consumers prefer paying surcharges when reaching cash is costly. Our results also shed light on the Australian reform that consists in removing the interchange fee.
|Item Type:||MPRA Paper|
|Original Title:||Paying for ATM usage : good for consumers, bad for banks ?|
|Keywords:||Banks ; ATMs ; Interchange Fees ; Welfare|
|Subjects:||G - Financial Economics > G2 - Financial Institutions and Services
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
|Depositing User:||Jocelyn Donze|
|Date Deposited:||06. Oct 2008 00:09|
|Last Modified:||20. Feb 2013 00:02|
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