ATM - charges

THE Competition Commission of Pakistan has found that the practice of charging the same rate (Rs15 per transaction) by 28 different banks for cash withdrawals by customers of rival banks from their ATMs represents an example of price collusion and an act of a cartel. The banks in question are members of an ATM network `switch`, 1-Link, itself a guarantee limited company created and owned by 11 of the member banks. 1-Link is one of two such ATM networks operating in the country. Having found 1Link and its members guilty, the commission has fined all the offending parties Rs770m in total.

The problems with ATMs in Pakistan have been commonplace for some years now, with network outages and frequent shortages of cash being some of the commonly highlighted ones. Additionally, security problems in some places mean customers often have to worry when they go to withdraw funds fromtheir accounts. While the banks and 1-Link claim that the CCP has wrongly applied competition law in fining them, customers may rightly wonder about the extra Rs15 they are charged every time they use an ATM of another bank are they getting a service that is reasonably safe and efficient at a competitive price? While the State Bank of Pakistan has worked towards keeping the charges by networks such as 1-Link and its client banks in check and there has been some effort at improving the customer experience at ATMs ensuring they are stocked with cash over weekends and holidays, providing brightly lit and more secure spaces, etc there is still a long way to go.

More broadly, as the CCP fine indicates, there are all manner of small fees and charges that banks bill customers in the hope they won`t notice or mind. More vigilance by the State Bank and entities like the CCP will help.