What are ATM Network Transaction Fees?

An ATM network transaction fee is a fee you sometimes have to pay when the automated teller machine (ATM) you’re using is not owned and operated by your bank. In other words, it’s a fee for a transaction conducted outside your bank’s network of ATM’s, hence the name. An ATM network transaction fee differs from an ATM surcharge fee in that the latter fee goes to the institution that owns an ATM, whereas the network transaction fee goes to your financial institution.

Sometimes – and this became almost a trend among banks in the 1990’s – the bank that owns a particular ATM will also charge people who aren’t their customers for using that ATM. When that’s the case, the person withdrawing the money may have to pay two fees for venturing outside the network: a network transaction fee to her own bank, and a second fee to the bank that operates the ATM.

Understandably, some customers get upset at the very notion of a network transaction fee. Why, they might wonder, must we pay fees in order to withdraw cash that belongs to us in the first place? And these fees can be especially vexing when you consider that, were you to pay them on a regular basis, they could cost you upwards of $50, maybe $100, every year. So what exactly can be done about such fees? For starters, you might consider one of the following remedies:

• Find a bank that doesn’t charge ATM network transaction fees. (Some bank customers aren’t even aware of the fact that not every financial institution charges them.) For example, imagine you live in Australia. You’ll find that while the Bendigo Bank charges a network transaction fee, the Bank of Queensland – among others – does not.

• Patronize a bank with an extensive network of ATM’s. If your bank has plenty of ATM’s in the areas where you live, work and visit frequently, then you won’t have to worry much about using one of their competitors’ machines.

• If you’re in a pinch – and if you have some time to spare – actually go inside a bank and ask a teller to withdraw your money instead of using an automatic teller machine. This way, no fees are involved!

Network transaction fees can hit your wallet especially hard when you’re traveling overseas. (In fact, some world travelers will use the terms ‘ATM foreign fee’ and ‘ATM network transaction fee’ interchangeably.) That’s mainly because when you’re visiting a foreign country, the chances are that much greater that you’ll have to consistently use ATM’s outside of your bank’s network. Plus, you may be charged fees to convert currency in addition to the ATM network transaction fees.

Before you leave home, therefore, it makes sense to find out if there are any circumstances under which your bank will waive its ATM network transaction fees for its customers when they’re abroad. For example, Bank of America will not charge ATM network transaction fees in foreign nations when its customers use ATM’s belonging to banks which are part of the ‘Global ATM Alliance.’ The Global ATM Alliance is a group of banks from all over the world that have formed an agreement not to charge their customers extra ATM or debit card fees when they go to other banks within the alliance. In addition, banks often waive certain fees, including network transaction fees, for preferred customers. So if you’re a preferred customer, ask your bank if your status gets you off the hook when it comes to those fees.

If you can’t seem to find a way around ATM network transaction fees when you’re overseas, then try to at least limit the number of times that you use an ATM while you’re away. Pay with credit cards and traveler’s checks when appropriate, and carry around with you as much cash as you can.