Automated Teller Machines:

Issues Related to Real-time Fee Disclosure

GGD/AIMD-00-224: Published: Jul 11, 2000. Publicly Released: Jul 11, 2000.

Additional Materials:


Thomas J. McCool
(202) 512-3000


Office of Public Affairs
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Pursuant to a legislative requirement, GAO provided information on real-time disclosure of foreign automated teller machine (ATM) fees levied by the card-issuing bank, focusing on: (1) alterations to the ATM system that would be needed to support real-time foreign fee disclosure; (2) estimated costs and timeframes associated with implementing real-time foreign fee disclosure; (3) potential competitive impact on ATM industry participants, defined to include various sized banks, ATM networks, ATM owners, and third-party processors; (4) potential impact on consumers; and (5) alternatives to real-time foreign fee disclosure.

GAO noted that: (1) according to ATM industry representatives, real-time foreign ATM fee disclosure is technically feasible but would require extensive restructuring by all major participants in the ATM industry; (2)they stated that extensive alterations to the current infrastructure - hardware and software systems - would be needed to support both the real-time foreign fee disclosure scenarios GAO examined in detail and more simplified real-time disclosure options; (3) U.S, ATM system is built on technology that allows an ATM cash withdrawal or other electronic fund transfer activity to be performed with a single message transmission for authorization and settlement of the transaction; (4) to provide real-time foreign ATM fee disclosure, the ATM industry could adopt one of several possible disclosure scenarios; (5) each of these scenarios would require card-issuing banks, networks, and ATM owners to revise and upgrade their hardware and software, in addition to modifying functions such as message processing, calculation of ATM fees, and stand-in processing; (6) most of the industry representatives GAO contacted indicated that there were too many unknowns, including dependencies on other industry participants, for them to estimate with any precision the costs or timeframes involved with implementing real-time ATM fee disclosure; (7) cost estimates, for software and hardware changes alone, ranged from $5 million for a large third-party processor to tens of millions of dollars for large banks; (8) time frame estimates ranged from 2 to 3 years to implement real-time ATM fee disclosure; (9) some industry representatives suggested that the burden of real-time fee disclosure might fall more heavily on smaller firms and organizations; (10) if consumers are unaware of foreign fees for ATM transactions or dissatisfied with the way they are disclosed, then they might benefit from real-time fee disclosure; (11) however, the banking regulators reported that they received very few complaints on the disclosure of ATM fees; (12) some ATM industry representatives suggested other options for enhanced disclosure of foreign fees that would cost less than real-time disclosure; and (13) they suggested augmenting the existing required written disclosure with more prominent written reminders in monthly statements or modifying the general statement on the ATM screen that a consumer's bank may levy a fee in addition to the surcharge amount to include an average or range of the foreign fee amount.

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