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ATM Direct Charging Reform: the Effect of Independent Deployers on Welfare

Author

Listed:
  • Donze Jocelyn

    (Toulouse School of Economics (Gremaq))

  • Dubec Isabelle

    (Toulouse School of Economics (Gremaq))

Abstract

In Australia, interchange fees on shared ATM transactions have been recently removed and replaced by usage fees directly set and received by ATM owners. We develop a model to study how entry of independent ATM deployers (IADs) affects welfare under the "direct charging scheme." We show that paradoxically, IAD entry benefits banks. Entry benefits consumers when they strongly value the associated growth of the ATM network.

Suggested Citation

  • Donze Jocelyn & Dubec Isabelle, 2011. "ATM Direct Charging Reform: the Effect of Independent Deployers on Welfare," Review of Network Economics, De Gruyter, vol. 10(2), pages 1-23, June.
    • Handle: RePEc:bpj:rneart:v:10:y:2011:i:2:n:3
    DOI: 10.2202/1446-9022.1237
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    References listed on IDEAS

    as
    1. Jocelyn Donze & Isabelle Dubec, 2009. "Paying For Atm Usage: Good For Consumers, Bad For Banks?," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 583-612, September.
    2. Knittel, Christopher R. & Stango, Victor, 2011. "Strategic incompatibility in ATM markets," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2627-2636, October.
    3. Donze, Jocelyn & Dubec, Isabelle, 2010. "The effects of regulating interchange fees at cost on the ATM market," Economics Letters, Elsevier, vol. 107(2), pages 187-189, May.
    4. Matutes, Carmen & Padilla, A. Jorge, 1994. "Shared ATM networks and banking competition," European Economic Review, Elsevier, vol. 38(5), pages 1113-1138, May.
    5. Donze, Jocelyn & Dubec, Isabelle, 2006. "The role of interchange fees in ATM networks," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 29-43, January.
    6. Brendan Filipovski & Darren Flood, 2010. "Reform of the ATM System - One Year On," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 37-45, June.
    7. Ioana Chioveanu & Ramon Fauli‐Oller & Joel Sandonis & Juana Santamaria, 2009. "Atm Surcharges: Effects On Deployment And Welfare," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 613-635, September.
    8. Nadia Massoud & Dan Bernhardt, 2002. ""Rip-Off" ATM Surcharges," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 96-115, Spring.
    9. Mcandrews James J., 2003. "Automated Teller Machine Network Pricing - A Review of the Literature," Review of Network Economics, De Gruyter, vol. 2(2), pages 1-13, June.
    10. Knittel, Christopher R. & Stango, Victor, 2011. "Strategic incompatibility in ATM markets," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2627-2636, October.
    11. Darren Flood & Jennifer Hancock & Kylie Smith, 2011. "The ATM Reforms - New Evidence from Survey and Market Data," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 43-50, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Tobias Wenzel, 2014. "Independent Service Operators in ATM Markets," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(1), pages 26-47, February.
    2. Heng Chen & Marie-Hélène Felt, 2022. "Canadians’ Access to Cash Before and During the COVID-19 Pandemic," Discussion Papers 2022-15, Bank of Canada.
    3. Donze, Jocelyn & Dubec, Isabelle, 2009. "La tarification des retraits aux distributeurs automatiques bancaires, une revue de la littérature [ATM withdrawal pricing, a survey of the literature]," MPRA Paper 16546, University Library of Munich, Germany.
    4. Markkula, Tuomas & Takalo, Tuomas, 2021. "Competition and regulation in the Finnish ATM industry," BoF Economics Review 8/2021, Bank of Finland.
    5. repec:zbw:bofrdp:2012_032 is not listed on IDEAS
    6. Wenzel Tobias, 2013. "Naive Consumers, Banking Competition, and ATM Pricing," Review of Network Economics, De Gruyter, vol. 12(3), pages 271-286, October.
    7. Clare Noone, 2012. "ATM Fees, Pricing and Consumer Behaviour: An Analysis of ATM Network Reform in Australia," RBA Research Discussion Papers rdp2012-03, Reserve Bank of Australia.
    8. Magnac, Thierry, 2015. "Foreign fees and customers'cash withdrawals," TSE Working Papers 15-560, Toulouse School of Economics (TSE).
    9. Kopsakangas-Savolainen Maria & Takalo Tuomas, 2014. "Competition Before Sunset: The Case of the Finnish ATM Market," Review of Network Economics, De Gruyter, vol. 13(1), pages 1-33, March.
    10. Magnac, Thierry, 2017. "ATM foreign fees and cash withdrawals," Journal of Banking & Finance, Elsevier, vol. 78(C), pages 117-129.
    11. Kopsakangas-Savolainen Maria & Takalo Tuomas, 2014. "Competition Before Sunset: The Case of the Finnish ATM Market," Review of Network Economics, De Gruyter, vol. 13(1), pages 1-33, March.

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    More about this item

    Keywords

    ATMs; direct charging reform; independent deployers;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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