ATMs are slowly disappearing. Does this mean you'll have to pay to access your money?

Bank-owned ATMs and physical branches are slowly decreasing across Australia, leaving many people unsure of how to withdraw money without paying fees.

The number of bank-owned ATMs in Australia has decreased. Source: AAP / Con Chronis

If you've needed to withdraw cash recently, there's a good chance you may have struggled to find an ATM connected to your bank.

You might also have noticed your local bank branch has shut down, or an ATM that isn't connected to any bank has appeared, charging you several dollars to use.

As society becomes increasingly online, cash is being used less and less, and how we use and access our money is changing.

But as banks close their branches and ATMs, what does this mean for taking cash out, and will you be charged for accessing your own money?

Are fee-free ATMs disappearing?

According to data from the Australian Prudential Regulation Authority (APRA), there was a decrease of 424 bank branches — or 11 per cent — across Australia from the year to June 2023.

Since 2017, branch numbers have declined by 37 per cent.

In 2017, there were 13,814 bank-owned ATMs in Australia, but by June 2023 this dropped to 5693, according to APRA.

Steve Mickenbecker, group executive of financial services at comparison site Canstar, said this is not necessarily bad news for those who use cash.

Mickenbecker pointed out that while the number of ATMs and physical bank branches has declined, more banks are sharing networks as of 2017.

"With the big four banks, years ago you would have had to pay a couple of dollars to use one of the other three branded ATMs," he said.

"Nowadays, they're all allowing you to access those ATMs without charge, so I'm not sure that the access to free ATM usage has diminished that much, even if the number of machines has."

Australia's 'big four' banks (ANZ, Westpac, the Commonwealth Bank and NAB) do not charge ATM fees. Source: AAP / Joel Carrett

Can I use another bank’s ATM to withdraw money?

Yes, you can use an ATM owned by another bank to withdraw money — but you might be charged a fee depending on the machine.

If you hold an Australian banking card, you can withdraw cash at an ATM owned by your bank, or one of Australia's big four banks (ANZ, Commonwealth Bank, Westpac or NAB) with no fee.

Some financial institutions also have agreements with one another, and allow their partners' customers to use their ATMs for free.

How can you avoid cash withdrawal fees?

Privately owned ATMs may be free for you to use if the owner has an agreement with your bank.

Otherwise, you will be charged a fee, which can range from $2 to $5 according to comparison website Finder.

Some retailers, such as supermarkets and petrol stations, also allow you to withdraw cash with your purchase at the register for no extra charge.

Customers of participating banks can also access cash via Bank@Post, which can be accessed at select Australia Post offices across the country.

Why do ATMs charge fees?

According to Mickenbecker, there are several reasons operators may charge customers to use an ATM.

One is to cover the costs of installing and maintaining the machine.

"If you are providing a machine, you've invested in the machine, maintenance, filling it up with cash, taking cash out, balancing the cash, paying the electricity, all of those costs," he said.

"So you've got to cover those costs and earn a profit to make sure you actually make the business worth doing."

Mickenbecker said while banks make profits through writing loans and raising deposits, cash access fees are a major money maker for privately owned ATMs.

Privately owned ATMS refer to machines that are not attached to a bank and instead may be owned by a large-scale operator, or by the owner of the venue.

"You typically find them in entertainment precincts and big shopping malls and stuff like that, and they're not aligned to any one bank," Mickenbecker said.

"They don't have the checking accounts and savings accounts that people are accessing at their bank ATM, so they don't earn any money from the interest that the banks earn ... so they've got no other source of income by what they collect from the people who actually use the ATM."

Are ATMs and cash being used less?

According to the Australian Banking Association's (ABA) Customer Trends 2023 report, 98.9 per cent of total transactions are now made via online and apps.

The report also found cash is now being used for 13 per cent of payments; a 57 per cent decline since 2007.

Australians also appear to be using physical bank branches less and less, according to the ABA, with major cities experiencing a 48 per cent drop in branch interactions and regional areas recording a 42 per cent drop between 2019 and 2022.

Phong Ngo, associate professor from the College of Business and Economics at the Australian National University, said Australia is slowly moving toward a cashless society.

"We are on track (to become cashless), and I think the pandemic definitely nudged us towards that," he said.

"If you look at data from the ABA, in 2008 online transactions were very very low, and about 70 per cent of transactions were cash, and these days it's less than 15 per cent ... and the big jump was during the pandemic, I think."