Danske Bank said that it is following the example of other banks in Finland that charge customers to withdraw cash from ATM machines. Starting in April, customers will be allowed five free cash withdrawals each month from automated teller machines.
Customers will then have to pay 60 cents for each additional cash withdrawal. Charges for such transactions had previously been included in customer service charges.
EU looking at ATM charges
Danske Bank said that it had previously applied service charges to other areas than ATM transactions. However it said that it will now streamline charges.
"The EU area is harmonising charges and because of that in practice the charges for ATM transactions will be harmonised," said Danske Bank personal banking director Kenneth Kaarnimo.
However another reason for the change is that banks have to pay for the physical processing of cash.
"These five free withdrawals exist so that people will have the money to take money from their accounts. But if you use this service more, one which requires background work, it will cost you. This is about cost recovery," Kaarnimo explained.
The charges will be applied regardless of card or account type. The payment will also apply to customers with monthly service packages for their current accounts. However the price of the service package will not change.
Danske Bank said that it will not apply the charge for cash withdrawals in transactions with tellers at bank branches.
Money from ATM and straight to the store
Many consumers prefer to use cash because they have become used to it. However Kaarnimo said that it’s not impossible for people to change their habits.
He said he was especially surprised to see how many people withdraw cash from ATMs, only to take it to a store a mere couple hundred metres away. He said that they could simply pay for their purchases using a bank card.
"For many it has been a way to manage their finances, but there are other options. For example there are free smartphone apps that allow you to check your bank balance, every hour if you wish," he added.
Elderly consumers in particular have fallen into the fixed habit of using cash rather than a card for purchases. Kaarnimo said banks should be better able to inform their customers about different payment options.
"Every day we advise clients of different ages about various options, and how they work. But we haven’t been able to reach out widely to provide information about different possibilities. The bank should be able to do a better job informing consumers," he stressed.
OP and Nordea: We won’t charge
For their part, OP Bank and Nordea said they have no intention of charging for cash withdrawals.
"Our competitors make their own decisions and competitors have their own pricing practices. We are not the first to have adopted these charges," Kaarnimo commented.
Service charges vary from bank to bank depending on the type of account or card, and even among banks in the same group.
The daily Turun Sanomat first reported on Danske Bank’s intention to charge for ATM cash withdrawals.