KEY POINTS:
Banks are doubling their charges for customers using automated teller machines owned by rival banks, from 50 cents to $1 per transaction.
The National Bank said last week that customers using a cash machine owned by a different bank would face the higher charge from December 1. Westpac introduced the $1 fee last month, joining ANZ and BNZ, which lifted their charges earlier in the year.
ASB is raising its fee to 75 cents from December 1. Kiwibank is holding its 50 cent charge but says it is only a matter of time before it also bumps it to $1.
The banks have defended the higher charges, despite making healthy profits in tight economic times.
They said A" networks were expensive to run and that they faced charges from other banks when customers use competitors' machines to withdraw cash.
"It's a user-pays service," said Kiwibank's Bruce Thompson.
Costs associated with the A" network included rents to owners where ATMs are installed, the costs of servicing and refilling machines with cash, vandalism and account reconciliation charges from other banks, he said.
"Kiwibank still charges 50 cents, however we can't guarantee we will be able to hold it at that," said Thompson. "It's probable we will be considering raising it to around $1. Obviously the key issue is, if you can, you should use your bank's ATMs."
A BNZ spokesman said the bank had raised its fee in May. "Our charge reflects the commercial costs of providing the service and delivering a world-class A" network - and the recovery cost reflects the costs of providing extended services at other bank A" networks."
Westpac spokesman Craig Dowling said when BNZ raised its charge earlier in the year it created an imbalance in the sector and caused others to follow.
"Maintaining the network around the country is very expensive. We have millions of dollars in machines, the money sometimes sits in outlying areas and it's not earning any interest.
"For quite some time the charges haven't covered the cost of maintaining the network."
National Bank spokeswoman Jessamy Malcolm justified her bank's impending fee rise: "The bank's customers expect our A" network to be well-maintained and in convenient locations. The fee increase reflects the cost of providing the A" service - including regular A" upgrades and new features such as multi-lingual capability - as well as the commercial cost of being able to provide customers with full services from other bank A" networks."
Consumer New Zealand CEO Sue Chetwin described the fee rise as a massive increase. "There's been no explanation as to why that's happened.
"We always have a question mark over bank charges - are they really a reflection of how much it costs the bank to provide the service?"
Chetwin said she would like to see all ATMs flash up a message telling customers how much they would be charged.
"Then you can make a decision whether to go ahead or not. But the thing to do is if you are taking money out, go to the bank your card is with so you won't face these charges."
She said Consumer NZ received a "regular stream" of complaints about banking practices.
David Tripe, of Massey University's Centre for Banking Studies, said with a $1 charge the banks would be making "a bit of a profit but it's by no means as swingeing as in other countries."
Tripe said little was known about how many people willingly paid the charge to use other banks' ATMs.
It remained to be seen if the higher charge would change habits, he said. "People are uncomprehending of bank fees. People will use another A" even when there is one from their own bank 50m away."
DEBIT CARDS POPULAR
Banks are shying away from introducing interest-free debit cards, despite increasing numbers of people falling into credit card debt traps.
Only Westpac has launched a debit card, although they are used widely overseas. The Debitplus card can be used to withdraw money or for phone and internet transactions.
Money is deducted from the holder's account with no bills or interest charges.
Westpac spokesman Craig Dowling said response to the debit card was "fantastic".
"We've had to work pretty hard to educate the market as to why it is such a good option.
"It's been particularly popular for young customers who are unable to avail themselves of credit card offers, general customers who use it a lot for travel and online shopping, and the elderly who don't want to use credit cards but who are getting more and more internet-savvy."
Dowling said other banks "weren't as convinced as we were" that it would be embraced by customers.
"It was a bit of a risk but it has paid off," he said.
Sue Chetwin from Consumer New Zealand said she believed other banks were thinking of launching debit cards and she would welcome more of them.
