ATM users may have to pay more for withdrawals. Here's why
Interchange fees is paid by customers for cash withdrawals at ATMs and CATMI is seeking to raise it to a maximum of ₹23 per transaction.
The Confederation of ATM Industry (CATMI) approached the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) to request an increase in the interchange fee. This is paid by customers for cash withdrawals at ATMs and CATMI is seeking to raise it to a maximum of ₹23 per transaction. Interchange fees is paid by the card-issuing bank to the bank where the card is used to withdraw cash.
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At present, banks offer savings bank account holders a minimum of five free transactions per month in Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi. For any other bank's ATM, three transactions are free.
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Stanley Johnson, executive director of AGS Transact Technologies, an ATM manufacturer, told Economic Times that the last time the interchange rate was increased was two years ago. CATMI has requested an increase to ₹21 while some other ATM manufacturers have proposed raising the fee to ₹23, he said, adding, "The last time, it took several years to hike this but I feel everyone is aligned and it's only a matter of time before the (fee) increase will happen."
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In 2021, the interchange fee on ATM transactions was raised from ₹15 to ₹17. At the time, the cap on fee that can be charged to the customer was increased from ₹20 to ₹21 per transaction.
