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Banks giving ATMs the ax?

By Claes Bell ·
Friday, July 27, 2012
Posted: 10 am ET

Used to finding a Bank of America ATM whenever you need one? Don't look now, but that could be changing.

This year, Bank of America has cut a record 1,536 ATMs, or about 9 percent of its total stock, write Hugh Son and Zachary Tracer of Bloomberg:

Bank of America chose to pull most of its ATMs at malls and gas stations in part because those devices only dispensed cash and weren’t available 24 hours a day, (Bank of America spokeswoman Anne) Pace said in an interview. Customers want to be able to deposit checks at an ATM, she said.

"It's about convenience and access, that’s what the customers are looking for," Pace said. "People aren't banking 9 to 5, they are banking when it’s convenient for them."

It costs banks an average of $1,700 per month to run an ATM on someone else's property, compared with $1,100 at a branch, said Tony Hayes, a partner at consulting firm Oliver Wyman in Boston. The difference stems from rental costs and fees for armored couriers to refill machines with cash, he said.

But is BofA's move an isolated event, or a sign that large banks are starting to abandon ATMs? Ann Carns of The New York Times Bucks Blog writes that it's more likely the former:

Other big banks say they have no plans to shrink their networks. JPMorgan Chase, the largest bank by assets, said it planned to expand its system. A Chase spokesman said in an email that the bank had more than 17,500 ATMs, "and that number will grow as we continue to build branches."

Citigroup has 10,428 Citi-branded ATMs, a spokeswoman said, including more than 6,000 machines at 7-Eleven stores, and has no plans to reduce those numbers.

Wells Fargo says it has about 12,000 ATMs since its merger with Wachovia, and has no plans for any changes.

U.S. Bancorp has 5,085 machines and has no plans to pull back on its network, a spokeswoman said.

Like Carns, though, I wonder about the long-term trend. Notwithstanding the old cliché, "cash is king," cash has grown increasingly rare as electronic payment methods like credit and debit become more ubiquitous.

I think as technologies like smartphone-based remote deposit capture and person-to-person payments become easier to use and more widely adopted, there will be fewer and fewer reasons to seek out an ATM, in the same way that the rise of cellphones has killed off the payphone. After all, if you have a device in your pocket that can perform many of the functions of an ATM, why go out of your way?

But in the meantime, having an extensive ATM network customers can use without paying an annoying fee is one of the major ways large banks differentiate themselves from community banks and credit unions, and so they'll continue to invest in them for the time being.

What do you think? Is a big network of ATMs important to you? Are ATMs on their way out, or will people always want easy access to cash?

Follow me on Twitter: @ClaesBell

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George Jefferson
September 05, 2012 at 7:48 pm

Eat the rich! Break up the banks! Transfer your money to a credit union!

September 05, 2012 at 2:38 pm

@ Cindy Shelton- look into US Bank's student checking account for your son. It is a free account for him- no fees for making deposits on his behalf in the branch.

Paffa Ferguson
September 05, 2012 at 2:12 am

I agree we should avoid the big banks. They are just pillaging for your cash with a dirth of fees. I rarely ever carry cash with me unless it is a true emergency and the power grid is down and I have to pay in cash. Otherwise it's debit all the way. I don't frequent cash only businesses either.

Paffa Ferguson
September 05, 2012 at 2:07 am

We are up to our eyeballs in electronic age gadgets what are we doing still playing with nickles and paper? Even your card can be done with hand held readers and the like. Tech has come along way I think it is time to dispense with physical money and go all the way to those electronic credit transfers. Anyone who has a cash only business is probably not paying a full share of taxes.

September 03, 2012 at 7:18 pm

I have no sympathy for banks. They've caused their own problems.They want to blame everyone else and charge them for their greed. If I make a mistake and overdraw my account by a few cents they want to charge me $35.00. So I don't write checks. It costs them very little to process these fees. If It was 5 or 10 dollars they could make so much more off of me because of the convenience factor of it.

September 02, 2012 at 12:49 am

People need to avoid these corporate banks like the plague. Put your money in a local community bank or credit union. These big banks are fee grabbing thieves.

Cindy Shelton
September 01, 2012 at 7:00 am

My son is attending college in another state ,after he graduated from high school he went an opened a account with Bank of America to have for college and my husband and I were just going to take money and deposit into his account. Needless to say he calls and there is an extra charge on his account for 10.00 , not knowing what it was for I called the bank where I was told that if he does not do all deposits and withdraws from the atm he would be charges . In other words if he does any transactions that includes his father and me depositing money in his account he will be charged 10.00. This is no help to him or me either one , I dont feel has a student he should be charged this college students do not have money and all were doing is giving money to bank of america . Second when we took him down to the college to start we knew he would not have a car to get around he was told there are atm machines everywhere on the campus . yet to find one and in order to get him any cash we had to drive 15 miles out of the way to find a branch or a atm . I am really sick of these companies taking advantage of their customers charging fees for everything then do not give you anything in return but fees and a hard way to go . Keep stabbing customers in the back to put money in their own pockets this is why bank of america was able to pay their dept from the federal government so fast. As well as bank of america is one of the highest donars for the election . THEY ARE ROBBING THE AMERICAN PEOPLE ALONG WITH ALOT OF OTHER COMPANIES.

Occupy Riverside
September 01, 2012 at 1:28 am

Please withdraw all money from the B of A and deposit it into the local credit union.

Paul Wilson
August 31, 2012 at 6:19 pm

I have a debit card usable at the BoA near Pathmark. The bank branch that was convenient shut down, but an inconvenient one stayed open. Now I expect the ATM there to remain there, and I expect it to not be running a diagnostics program when I come in to get monies, as the closing of the Wash.Ave one was a real kick in the belly, for me !

Thomas Paladin
August 31, 2012 at 6:05 pm

@Arlo, yes, it does cost that much to have an ATM in a mall. First, you must pay rent PLUS a share of the ATM fees to the property owner. Second is the cost of maintenance for the machine, which includes receipt paper, cash replenishment (services provided by Garda, Loomis, Brinks, etc.) and second-line repair to monitors, card readers and the cash dispensing motors and belts. Third is the telecom cost for high-speed connectivity to the financial networks (Visa, FTPS, CO-OP, etc) plus the per-transaction charge. Then when you amortize the cost of the ATM hardware plus the software and any enhanced services like custom graphics, you do indeed run into such high per-month costs.