Stream One: Empower consumers to get a better deal

Establish taskforce with Reserve Bank to monitor and enhance ATM competition reforms

The Gillard Government will take further action, if required, to enhance the current implementation of reforms to boost competition and transparency on ATM fees, and will instruct the Treasury to establish a taskforce with the Reserve Bank to monitor the ATM industry.

The joint Treasury / Reserve Bank Taskforce will report to the Government in June 2011 on the need for further action, with an early report in February 2011 on appropriate action for dealing with issues specifically affecting Australian indigenous and other remote communities.

On 3 March 2009, the RBA and the ATM industry introduced a package of reforms designed to improve transparency, flexibility, efficiency and competition in the Australian ATM system. Key elements of the reforms included:

  • Abolishing bilateral interchange fees paid by banks and other financial institutions to each other for the provision of ATM services. These interchange fees were rarely renegotiated, prices did not reflect costs, and over time interchange fees could have resulted in under provision of ATM s, particularly in high cost locations in rural, regional and remote areas.
  • Allowing ATM owners to charge cardholders directly, significantly increasing the transparency of ATM fees (with charges disclosed to the cardholder prior to their transaction being finalised).
  • Setting a cap on costs charged to new entrants wishing to connect to the ATM system.

These reforms have already strongly encouraged Australians to change their behaviour and switch to using ATMs which don't charge a fee, with ATM fees paid by cardholders being reduced by $120 million in the first year since the reforms were introduced.

Around two-thirds of ATM transactions now don't incur a fee, and nearly all cardholders have access to a network of at least 1,500 ATMs on which they do not pay a fee. In addition, the number of ATMs has increased by around 1,500, including in rural, regional and remote areas.

ATM Taskforce Terms of Reference [PDF 34KB]