Australian consumers have changed their cash-withdrawal patterns to save on fees following sweeping ATM reforms the central bank introduced last year, according to a report from the Reserve Bank of Australia.

The new rules, introduced in March 2009, altered the way ATM owners are paid for transactions initiated by customers of other banks (see story).

Before the reforms, the cardholder’s bank paid an interchange fee to the ATM owner. The issuer then charged the cardholder an ATM foreign fee.

The reforms abolished interchange and allowed ATM owners to charge noncustomers directly. The ATM owner, however, first must display the fee on the screen so users have the opportunity to cancel the transaction without cost.

The central bank mandated the changes to make the fees obvious, promote competition among ATM owners and provide an incentive to increase deployments.

The fees ATM owners are charging noncustomers, which varied between AU$1.50 (US$1.27 or 1.05 euros) to AU$3 across banks, have stabilized at about AU$2 nationwide, according to the Reserve Bank report.

Consumer use of foreign ATMs fell to 38% of transactions in March from about 44% during the same month last year, and bank customers have avoided more than $120 million in ATM fees by reducing their use of other deployers’ machines since the reserve bank introduced the reforms, according to the report.

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