ATM operators across the country are pushing for an increase in the interchange fee for cash withdrawals. They have reached out to both the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) to support their request, According to the media report.
The Confederation of ATM Industry (CATMI) is pushing for a rise in the interchange fee, aiming for a maximum of Rs 23 per transaction to ensure greater financial support for the industry.
Stanley Johnson, Executive Director of AGS Transact Technologies was quoted as saying in the media report that the interchange rate was last increased two years ago.
“We have been reaching out to the RBI, and it seems they are supportive of our request. CATMI has proposed raising the fee to Rs 21, while some other ATM manufacturers have suggested Rs 23,” he said.
“The previous hike took several years, but it seems like everyone is aligned now, and it’s only a matter of time before the fee increase is approved,” Johnson added.
In 2021, the interchange fee on ATM transactions was raised from Rs 15 to Rs 17.
What does the interchange fee on ATM transactions refer to?
This fee is paid by the bank that issues the card (issuer) to the bank where the card is used for cash withdrawal (acquirer). Furthermore, the maximum fee charged to customers per transaction has been raised from Rs 20 to Rs 21.
Another ATM manufacturer mentioned in the media report stating that there has been considerable lobbying to increase the interchange rate. “A request has been submitted via NPCI, and banks have also agreed to a rate increase,” the individual added.
Currently, in six major cities – Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi – banks provide their savings account holders with a minimum of five free transactions per month. At ATMs of other banks, three transactions per month are offered free of charge.