Students and cash machines

After short hesitation I decided that instead of taking my older ideas out of the bag, I will write my first blog in something completely random that I have just stumbled upon. Walking down to lunch I passed the line of cash machines (which I think are the only ATM facilities on campus) and noticed that there was a long queue for one of the banks’ ATM, and hardly anyone waiting for the other two banks’ cash machine. Although I knew that the bank that owns the said ATM has the largest market share on campus, it still puzzled me how loyal students are to their bank even in cases where using the other banks facilities would mean no extra cost (if anything, they would be better off by having to queue less). This made me think that there might be a hidden fee in using allegedly free ATM’s of rival banks. After a short research I found that there isn’t, but if I use a rival bank’s cash machine, then my bank will have to pay a fee (called Multilateral Interchange Fees) to the rival bank, which the customer’s bank absorbs. Therefore students sticking to their own bank’s ATM – even at the cost of queuing – act in favour of their bank that doesn’t have to pay for the incurring interchange fee.

The only explanation I could come up with is that of old habits, rooting in the days when getting cash from a rival bank’s ATM incurred extra costs for the customer.


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