If you're dumb enough to think capping fees will help at all .... READ THIS
Reader comment on: A 50 Cent Cap on ATM Fees
Submitted by Gianni D (United States), May 19, 2010 16:37
To anybody that agrees with a .50 cent cap on ATM fees, please read this:
First, transactions are not 37 cents, the statistics used are from 1997.
Secondly, though that may be the marginal rate (albeit a wrong figure to begin with,) the ACTUAL rate incurred is much higher, roughly 2.00 per transaction to process a transaction based on average volume, overhead such as insurance, security service to fill the machine, wireless internet processing, maintenance, repair, obvious consumables like receipt paper, depreciation, and of course opportunity cost of capital (banks lend money on an interest rate, banks tie up capital, upwards to 300K per machine on a weekly basis just to offer it for free!) To give banking customers free withdrawals banks MUST offset the actual TRUE cost of 2.00 per transaction with non-banking clients. Furthermore, some fees actually may be higher. Weekend visits by Brinks are at least 250$ just for a diagnostic with a machine malfunction. If that happens 4 times per month which is about average as well, the bank would need at LEAST 400 transactions @$2.50 just to break even (FROM NON BANKING CUSTOMERS)
If the fee cap went on, 350,000 of the 482,000 atms available would be pulled out immediately as they would be 100% nonprofitable. 68% of ATMs are owned by independent operators who would have no incentive to keep their businesses open. Hundreds of thousands of jobs including industries like private armored car companies would be lost. What about technicians, suppliers, manufacturers, and the incentive of creating new ATMs (not only dispensing cash, but things like every day items, etc). This would kill innovation completely.
Since when can congress cap fees on convenience? We're selling money at the right time and the right place. I paid 3.50 for a soda from a Vending Machine outside my Vegas hotel room. I didn't care, I chose to buy it at the price. If there's not enough demand, prices will drop, or machines will be pulled. Supply and Demand run this market. The government doesn't cap fees on hot dogs just because the hot dog stand guy was clever enough to find a busy intersection. Price Control = the first step towards socialism. Banks have to make money SOMEHOW to offset the costs basically of protecting your assets in a vault--since when is a profit illegal to make? What's wrong with a profit? What's wrong with this country? If you don't want to pay for it, have the discipline to go to your own bank. Better yet, if you don't like banking fees, then put your money in your mattress. Have Fun with that one.
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