Background: What the ACCC’s regional ATM decision means
The ACCC has approved a three-year trial of shared regional ATMs. The decision supports fee-free cash access but also acknowledges that shared infrastructure could affect the viability of existing regional banking services.
The Australian Competition and Consumer Commission has given the green light to a three-year trial of shared regional ATMs — an experiment that could eventually influence how cash services are provided across regional Australia.
The Australian Banking Association sought approval for banks to cooperate in operating up to 20 multi-bank ATMs in regional and remote communities. Under the trial, anyone with an Australian-issued bank card will be able to withdraw cash without paying an ATM fee. Customers of participating banks will also be able to make fee-free cash deposits where deposit functionality is installed.
The proposal comes as Australia's cash infrastructure contracts. Cash now accounts for around 15 per cent of consumer payments, although about 1.5 million Australians still rely mainly on cash. The number of ATMs has fallen by around one-quarter from its 2016 peak, while the number of bank branches has roughly halved over the past 15 years. Regional communities are particularly exposed when the remaining service disappears.
The trial is designed partly to test whether banks can share the cost of providing cash infrastructure where operating individual networks may no longer be economical. Most of the trial machines will be existing NCR Atleos ATMs converted from fee-charging to fee-free operation, with two new ATMs planned. Deposit functionality is intended for at least 10 sites.
The ACCC identified two principal public benefits: better access to cash in the communities covered by the trial, and better information about whether a wider shared ATM network could work.
But the competition issue is more interesting.
Regional banks argued that a collectively funded fee-free network could divert withdrawals, deposits and customer foot traffic from existing regional bank branches and ATMs. The ACCC accepted that substantial diversion could negatively affect the viability of a regional branch. However, it concluded the risk was limited in this trial because very few of the proposed locations overlap with regional bank branches and branches provide services an ATM cannot replicate.
Importantly, this is not approval for a national shared ATM network. Any broader rollout would require another ACCC authorisation. The ABA sought five years for the trial, but the ACCC granted only three, partly because the cash and regional banking markets are changing rapidly.
The real test will therefore be what the trial teaches us: not simply whether people use free ATMs, but whether shared infrastructure adds to regional banking access or displaces services already being provided.