The fight over ATM fees is expanding overseas, with ING offering fee-free withdrawals from every ATM in the world to customers who conduct their main banking business with the digital bank.
The move comes as banks face pressure to roll back unpopular fees, while ING is seeking to bulk up its share of the market by targeting regular overseas travellers or shoppers at foreign websites.
As well as scrapping ATM fees internationally, it will also remove international purchase fees from its credit and debit cards – which were previously 2 per cent of the purchase price.
To qualify for the offer, customers will need to deposit at least $1000 a month into the account, and make at least five card purchases each month.
It is a response to growing demand for overseas purchases, and part of a strategy by the lender to win over more customers who use ING for their main transaction account.
The Dutch-owned bank has recently moved into credit cards and insurance, from its roots in savings products and loans, and the transaction account is highly valued by banks because it allows banks to sell other products.
“We are seeing some significant changes in customer behaviour,” head of retail banking Melanie Evans said.
“We’ve got one in three ns leaving the country each year to travel internationally, we’ve got almost half of ING customers shopping online from their living rooms.”
Managing director of payments consulting firm The Initiatives Group, Lance Blockley, said it typically cost banks $1 to $2 when a customer withdrew money from an ATM overseas.
“Depending on the number of their cardholders accessing overseas ATMs, it could be a reasonable expense, but a very good marketing move,” he said.
The removal of ATM fees has also come at a time when customers are turning away from cash – ING said overseas withdrawals by its customers fell 12 per cent last year.
At the same time, however, foreign digital transactions are growing strongly. The bank’s average customer’s overseas spending has lifted by 17 per cent in the past three years.
“There’s nothing worse than coming home from a holiday or potentially doing your shopping for Christmas, and seeing not just the transaction move out of your bank account, but the 2 per cent fee come through after that,” Ms Evans said.
Ms Evans said the bank would not profit from the exchange rate offered for transactions made on the card.
The move will also help ING keep a key point of difference. Since 2009, it has offered fee-free ATM withdrawals across all cash machines in by refunding the fees banks charged customers of other institutions for making withdrawals.
After the big four banks recently abolished their ATM fees for customers of other banks, most customers have far more access to fee-free ATMs. ING will also have saved money because it no longer needs to reimburse customers for the fee.
Even so, Ms Evans said the recent changes by banks to remove ATM fees affected only about 40 per cent of the ATMs in .