ATM Industry body requests National Payments Corporation of India (NPCI) to hike the ATM interchange fee. Read on to know more.
The Confederation of ATM Industry (CATMI) has made an application to the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) requesting an increase in the interchange fee. Economic Times in a report said, "The confederation has sought to raise the amount that can be charged to customers from Rs 21 to Rs 23 per transaction."
"The interchange rate was increased two years back; we have been reaching out to the RBI, and it looks like they are supportive of it. We (CATMI) have requested the fee to be raised to Rs 21 while some other ATM manufacturers have sought to increase this to Rs 23," ET quoted Stanley Johnson, executive director of AGS Transact Technologies as saying.
Another ATM manufacturer said it took several years to accomplish the hike in the previous instance, however, this time all stakeholders are already in agreement to accomplish the hike soon. There has been heavy lobbying at increasing the interchange rate, banks have consented to this and a representation has been sent through NPCI, he said.
Whenever you use an ATM of a bank other than the bank that issued your card, the card-issuing bank has to pay a certain amount to the bank that allowed you to avail ATM service. In 2021, the interchange fee on ATM transactions was raised from Rs 15 to Rs 17. Further, the cap on the fee that can be charged to the customer was increased from Rs 20 to Rs 21 per transaction in 2021.
The RBI release then said that it allowed an "increase in interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all centers effective from August 1, 2021."
"Customers are eligible for five free transactions (including financial and non-financial transactions) monthly from their bank ATMs. They are also eligible for free transactions (including financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centre," RBI said.
Currently, in metros such as Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi, banks offer their savings bank account holders a minimum of five free transactions each month. As much as three ATM transactions are free cost at any other bank's ATM.