Banks apply free on-net money withdrawal, account transfer
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Despite being allowed to charge on-net fees for automatic telling machine (ATM) transactions, some commercial banks have recently applied the exemption to on-net money withdrawal and account transfer to attract new customers and develop the retail banking segment.
Platinum debit cards, while Viet Capital Bank and SCB have exempt money withdrawal fee for international and domestic debit cards.
The exemption of money withdrawal fee at all ATMs nationwide is also being offered by other banks such as TPBank and BaoVietbank.
Talking about the move, Viet Capital Bank said free money withdrawal via ATM will encourage people to make non-cash payments. This policy is being implemented with great support from banks.
A representative from another bank said State Bank of Việt Nam approved commercial banks to charge on-net fees for ATM transaction since March 2013 to offset the cost of purchasing machines and periodic maintenance, however, some banks are now willing to offset the losses to increase customers.
According to the representative, the bank having cardholders still has to pay VNĐ3,300 to their partner for each external money withdrawal. Therefore, ATM operations of the bank have never been profitable.
Industry insiders admitted that ATM card service companies often incur losses because an ATM costs tens of thousands of US dollars besides large annual maintenance fees. In addition, the cost of renting sites to install ATMs is becoming more and more expensive. Interest from non-term deposits of ATM cardholders therefore is not enough to offset the costs.
To offset the costs, the money withdrawal fee charged at other banks averages VNĐ1,000-3,000 per transaction and the fee for inter-bank money transfer is VNĐ11,000.
According to banking experts, the fee exemption policy at some banks is within the banks’ retail banking development plan, and is also a way for banks develop individual customers as well as products and services for the customers.
This is also the premise based on which banks can promote other products and services, such as Mobile Banking and Internet Banking, they said.
The country currently has more than 17,000 ATMs nationwide.
Questions & Answers
Q.Which specific banks are currently offering free money withdrawal for international and domestic debit cards?
Which specific banks are currently offering free money withdrawal for international and domestic debit cards?
Viet Capital Bank and SCB are exempting money withdrawal fees for both international and domestic debit cards. Other banks like TPBank and BaoVietbank are also offering free withdrawals at all ATMs nationwide.
Q.Why did the State Bank of Việt Nam originally allow commercial banks to charge on-net fees for ATM transactions?
Why did the State Bank of Việt Nam originally allow commercial banks to charge on-net fees for ATM transactions?
The State Bank of Việt Nam approved commercial banks to charge on-net fees since March 2013. This was intended to help banks offset the significant costs of purchasing ATM machines and covering their periodic maintenance expenses.
Q.How do banks justify the cost of offering free ATM withdrawals and transfers to customers?
How do banks justify the cost of offering free ATM withdrawals and transfers to customers?
Banks view this as part of their retail banking development plan to attract new customers and grow their individual customer base. They also hope to promote other services like Mobile Banking and Internet Banking.
Q.What are the typical costs associated with operating ATMs that banks usually need to cover?
What are the typical costs associated with operating ATMs that banks usually need to cover?
ATM operations incur significant costs, including the machine's purchase price of tens of thousands of US dollars, large annual maintenance fees, and increasingly expensive site rental costs. Banks also pay a fee to partners for external withdrawals.