What Is a Surcharge-Free ATM? How It Works and Who Pays the Fee 

ATM fees hit another record high in 2025. What catches people off guard isn’t the surcharge itself. It’s finding out they still got charged after using a machine that was supposed to be free.

According to Bankrate’s 2025 Checking Account and ATM Fee Study, the average surcharge reached $3.22, a record for the fourth consecutive year. Add in what your own bank might charge, and the average total cost of a single out-of-network withdrawal climbed to $4.86.

We’ve been in the ATM business since 1994 and have helped place thousands of machines across the U.S. through ATMDepot.com.. In our experience, the surcharge confusion catches more first-time cash users off guard than almost any other ATM issue. 

Here’s how the fee structure works, who pays, and what to watch for.

What “Surcharge-Free” Actually Means

A surcharge-free ATM is a machine where the owner has waived the fee, blocked the fee due to an arrangement with a financial institution or 3rd party, or runs on a surcharge-free network like MoneyPass, for example.  They would normally charge you for the withdrawal. It doesn’t mean the transaction is free.

When you use an ATM that isn’t owned by your bank, the owner of that machine typically charges you a fee for using it. Think of it like a vending machine: someone bought it, keeps it stocked with their own cash, and maintains it. That fee is called a surcharge, and it goes directly to the ATM owner for lending you their money while they wait to get reimbursed by your bank.

Surcharge-free simply means that fee has been waived for you or someone else is paying it. You may also see it called a fee-free ATM or no-surcharge ATM. Same thing.

Here’s where things get confusing. There are two separate fees that can show up when you use an out-of-network ATM:

Fee 1. ATM owner’s surcharge. This is what the machine owner collects from cardholders who aren’t their customers.

Fee 2. Your bank’s out-of-network fee. Sometimes called a foreign fee, charged by your own bank for using a machine outside their network.

Two different fees. Two different parties.

Surcharge-free only eliminates the first one. Your bank’s fee is a separate matter entirely and depends on your specific account and your bank’s policies. So surcharge-free doesn’t automatically mean the withdrawal is free. It means one of the two possible fees is off the table, which is still real money, especially as surcharges keep climbing.

How Surcharge-Free ATMs Work

The whole system runs on what’s called a network participation model, and once you understand it, the “who pays” question starts to make sense.

Banks, credit unions, and other financial institutions pay to join large ATM networks like Allpoint, MoneyPass, or CO-OP. By joining, they give their cardholders surcharge-free access to ATMs in that network. That’s what in-network ATM access means in practice. The ATM owner still gets compensated, just through the network rather than directly from you at the machine. Think of it as a membership arrangement. Your bank covers the cost, so you don’t see a surcharge at the machine.

Here’s how each fee shakes out under that arrangement:

Fee 1, the ATM owner surcharge, is covered by the network agreement. You don’t see it at all.

Fee 2, your bank’s out-of-network fee, still depends on your account. The national average for this fee is $1.64, according to the Bankrate 2025 study. Whether it applies to you depends on your bank’s specific policies.

Who Actually Pays?

The fee doesn’t disappear. It just moves.

For your bank or credit union: they pay participation fees to be in the network. This is often structured as a monthly fee, a per-transaction cost, or both. It’s their way of offering surcharge-free access as a competitive perk, and it works because ATM fee waivers matter when people choose where to bank.  Some banks also reimburse a limited number of out-of-network fees. Cash App and SoFi, like many internet financial institutions, do this. 

For the ATM operator: independent operators in surcharge-free networks may receive interchange income from the network instead of a surcharge from the cardholder. The revenue structure is different, and volume is what makes it work. A machine doing 10 to 15 transactions a day at a $3.00 surcharge generates real income. That same machine inside a surcharge-free network needs the transaction volume to justify the interchange rate it’s getting. We’ve seen operators join surcharge-free arrangements at busy retail locations and do just fine. We’ve also seen the same setup struggle at a low-traffic spot where the volume isn’t there. The fee doesn’t disappear. The arrangement just changes who covers it. Some ATM Operators choose to charge a very low surcharge in order to attract users and offer an inexpensive convenience. This can often be seen in nail salons and barbershops where tipping in cash is appreciated and the cost of accepting a credit card is getting expensive for the retailer.

The Major Surcharge-Free ATM Networks

A few major networks handle most surcharge-free ATM access across the U.S.

Allpoint is the world’s largest retail-based surcharge-free network, with about 55,000 ATMs globally and around 40,000 in the United States. You’ll find them at Target, CVS, Walgreens, Costco, Wawa, Speedway, and Kroger-affiliated stores. Major bank participants include Ally Bank, Capital One, Chime, USAA, and Charles Schwab.

MoneyPass operates between 40,000 and 61,000 surcharge-free ATMs across the country, with a strong presence at 7-Eleven locations. Fiserv acquired MoneyPass in 2019, and through its member institutions, more than 95 million consumers have access to the network. Independent Operators sometimes choose to offer this network if their processor allows it to attract more users.

CO-OP is built specifically for credit union members and includes around 30,000 ATMs at credit unions and select retail locations nationwide.

Smaller regional networks like SUM also serve community banks and credit unions in specific areas.

Finding these ATMs is straightforward. Your bank’s mobile app usually has a built-in locator that highlights in-network machines near you. Allpoint, MoneyPass, and CO-OP also have their own locators.

When a Surcharge-Free ATM Might Still Have a Fee

Surcharge-free networks save people money every day. A few things will still catch you off guard, though.

Your bank may have its own fee. Even at a surcharge-free ATM, your bank might charge a separate out-of-network fee. If that applies to your account, you’ll still see a charge, just from your bank rather than the machine. Check your account disclosures.

Network mismatches happen. Not every card works at every surcharge-free network. If your bank participates in Allpoint but the ATM you’re using is part of CO-OP, the surcharge-free benefit may not apply. Know which network your bank belongs to.

Prepaid cards vary. Some prepaid debit cards participate in surcharge-free networks, and some don’t. Check the card’s terms and fee schedule rather than assuming the network logo on an ATM means you’re in the clear.

International use has its own rules. Allpoint has ATMs in Canada, the UK, Australia, and Mexico. But even if the ATM doesn’t surcharge you, your bank may still apply a foreign transaction fee. Those are bank-side costs, not ATM-side costs.

Check your bank’s out-of-network fee policy before you assume you’re covered. Know both numbers: what the ATM charges and what your bank charges. That’s your real cost. If you use an ATM only occasionally, the convenience and small fee often outweigh the time it takes to find a surcharge-free machine.

Why ATM Surcharges Keep Rising

If it feels like ATM fees go up every year, that’s because they have. The average ATM surcharge hit $3.22 in 2025, a record for the fourth year in a row, and the total average cost of an out-of-network withdrawal reached $4.86, up from $4.77 in 2024.

The reason comes down to fixed costs and declining usage.

An ATM has real operating expenses regardless of how many people use it: the machine itself, maintenance, receipt paper, communication lines, insurance, and often vault cash management. Americans made 6 billion ATM cash withdrawals in 2009, but that dropped to 5.8 billion by 2015 and 3.7 billion in 2021, according to the Federal Reserve 2022 Payments Study. As that volume shrinks, those fixed costs get spread across fewer transactions per machine. When the math changes, operators adjust the surcharge to keep the numbers working.

We’ve watched this play out across our own network of machines over the past two decades. Locations that were profitable at a $2.50 surcharge ten years ago often need $3.00 or more today just to cover the same costs. The machine costs are real, and they don’t go away just because transaction volume does. Cash still matters, and people continue to use it, which is why the business remains viable even at increased costs.. Digital payments and credit cards are tracked, and some people prefer to have some transactions remain private. 

According to the Bankrate 2025 study, Atlanta had the highest average total ATM fee among major metros at $5.33, while Boston came in lowest at $4.37.

This is part of why surcharge-free networks have become more valuable over time. When a bank invests in network membership, it’s saving its customers real money on every qualifying withdrawal.

What This Means If You’re Thinking About the ATM Business

Here’s how most operators actually make money: the surcharge. Every time someone who isn’t a customer of that machine’s bank pulls cash, the operator collects a fee. That fee covers the machine, maintenance, and cash loading; what’s left is income. Surcharges typically run $2.50 to $4.00 depending on location and market, but we’ve seen everything from $1.00 at a nail salon trying to drive foot traffic to $5.00 at a busy bar where convenience is the whole point. We even implement a percentage-based surcharge when warranted.

Based on placements we’ve managed through ATMDepot.com, the locations that consistently outperform expectations share one trait: foot traffic that was already there before the ATM arrived. A busy convenience store, a packed laundromat, a high-volume liquor store. The ATM captures transactions that would have happened anyway. That’s the model that works.

Operators inside surcharge-free networks can sometimes earn through interchange instead of a direct cardholder surcharge. The math can still work, but volume is what holds it together. A low-traffic location inside a surcharge-free network is a tough business. A high-traffic one can work fine. Know your numbers before you commit. Tourist and international destinations often work well.

There’s also the vault cash side to consider. Whether a machine is surcharge or interchange-based, the operator still needs to keep it funded. Our guide on how much vault cash an ATM operator needs covers what that looks like in practice.

The Bottom Line

Surcharge-free saves you one fee. Not both. In 2025, that one fee averaged $3.22, so it’s real money worth avoiding if you’re an avid ATM user. If you are an occasional ATM user, the convenience is often the factor and reason for using a specific ATM..

Before you assume a withdrawal is free, get both numbers: what the ATM charges and what your bank charges. Those are two separate questions with two separate answers.

If you’re pulling cash more than two or three times a month, either visit your own bank if possible or find a bank that offers Allpoint or MoneyPass, or one that reimburses out-of-network fees. Several online banks and credit unions do both. That setup is what makes ATM fees disappear.

If you’re thinking about placing an ATM at your location, getting into the ATM business, or want to understand how surcharge and interchange revenue actually works before you commit, explore ATMDepot membership options. Members get access to ATM business training, member-only equipment and processing pricing, and resources built specifically for ATM operators.

You can also call 888-959-2269 to talk through your options with us directly.

TL;DR

• A surcharge-free ATM means the machine owner isn’t charging you a fee for the withdrawal.
• “Surcharge-free” doesn’t always mean the transaction is completely free. Two separate fees can apply to any out-of-network withdrawal, and surcharge-free only eliminates one.
• Your own bank may still charge a separate out-of-network fee, averaging $1.64 nationally (Bankrate, 2025 Checking Account and ATM Fee Study).
• The biggest surcharge-free networks are Allpoint (55,000+ ATMs), MoneyPass (40,000 to 61,000 ATMs), and CO-OP (around 30,000 ATMs).
• ATM surcharges hit a record $3.22 in 2025, driven by rising fixed costs and declining cash usage.

Frequently Asked Questions About Surcharge-Free ATMs