Despite being allowed to charge on-net fees for automatic telling machine (ATM) transactions, some commercial banks have recently applied the exemption to on-net money withdrawal and account transfer to attract new customers and develop the retail banking segment.

ACB is offering a programme on exemption of money withdrawal fee for international platinum debit cards, while Viet Capital Bank and SCB have exempt money withdrawal fee for international and domestic debit cards.

The exemption of money withdrawal fee at all ATMs nationwide is also being offered by other banks such as TPBank and BaoVietbank.

Talking about the move, Viet Capital Bank said free money withdrawal via ATM will encourage people to make non-cash payments. This policy is being implemented with great support from banks.

A representative from another bank said State Bank of Viet Nam approved commercial banks to charge on-net fees for ATM transaction since March 2013 to offset the cost of purchasing machines and periodic maintenance, however, some banks are now willing to offset the losses to increase customers.

According to the representative, the bank having cardholders still has to pay VND3,300 to their partner for each external money withdrawal. Therefore, ATM operations of the bank have never been profitable.

Industry insiders admitted that ATM card service companies often incur losses because an ATM costs tens of thousands of US dollars besides large annual maintenance fees. In addition, the cost of renting sites to install ATMs is becoming more and more expensive. Interest from non-term deposits of ATM cardholders therefore is not enough to offset the costs.

To offset the costs, the money withdrawal fee charged at other banks averages VND1,000-3,000 per transaction and the fee for inter-bank money transfer is VND11,000.

According to banking experts, the fee exemption policy at some banks is within the banks’ retail banking development plan, and is also a way for banks develop individual customers as well as products and services for the customers.

This is also the premise based on which banks can promote other products and services, such as Mobile Banking and Internet Banking, they said.

The country currently has more than 17,000 ATMs nationwide. – VNS