Banks withdrawing from ATMs – another failure of regulation

Talk of Irish banks selling off significant parts of the ATM cash machine network to private operators raises once again the failure of Ireland's retail financial services sector to properly invest in infrastructure.

The driving force behind the move is reported to be the age of the existing network – with much of it now too old to even accept modern software upgrades. But with profit margins still wafer thin and Irish banks paying a financial price for a series of past transgressions, network investment has been notable by its paucity.

Once again, the consumer faces the prospect of paying a price – in this case from non-bank providers who are not constrained by Central Bank of Ireland control over what they can charge. This appears to have been a known issue since at least 2001 but, once again, no legislation has been put in place to address it.

As the banks tell it, they are simply “following customer habits” and “adapting to an increasingly cashless society”. But, in large part, it is the banks themselves driving this process. Accessing cash in a bank is now an exercise in frustration, where it is possible at all.

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Yes, the use of “tap and go” cashless technology is rising but customers still rely on ATMs. The amount withdrawn from the machines is down over the past decade, but people are still taking around €4,000 a year per capita from ATMs – that’s the fifth highest level in Europe.

An Indecon report for the Department of Finance in 2018 on the payments sector also noted that ATM use is rising across Europe, even while it is dropping in Ireland though it was not definitive on why that was the case.

It also remains the case that electronic payments are less accommodating of the elderly and the very young. And they continue to be subject to cybersecurity issues and simple software glitches as Irish bank customers have discovered on several occasions over recent years.

And that’s before you address the increasing discomfort of consumers with banks – or anyone else – knowing their every move.