Cash Service ATM Fee 1,000 Won... Continuous Increases Expected This Year as Well

Following last year's hike by Korea Electronic Finance,
Hannet and Hyosung TNS also raise cash service fees

[Source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] The increase in cash service (short-term card loan) ATM fees that began last year is continuing this year. Following Korea Electronic Finance, HanNet and Hyosung TNS have also raised fees for cash services, which is expected to increase the burden on consumers using cash services.

According to the card industry on the 4th, Woori Card plans to raise the fee for cash service usage at ATMs and cash dispensers (CD) operated by Hyosung TNS to a flat rate of 1,000 KRW per transaction starting at midnight on the 1st of next month. The existing fees of 800 KRW during business hours and 900 KRW outside business hours will be increased by 100 to 200 KRW. Earlier, another ATM operating value-added network operator (VAN), HanNet, also raised its cash service fees from 800-900 KRW to 1,000 KRW starting last month.

The increase in ATM and CD fees by card companies began last year. Korea Electronic Finance, the largest financial automation equipment operator in the country, raised the cash service fees for ATMs and CDs it operates by 100 to 200 KRW to 1,000 KRW early last year. This was the first increase in cash service fees in 10 years. Accordingly, Shinhan, KB Kookmin, and Woori Card raised the cash service fees at ATMs and CDs operated by Korea Electronic Finance from 800-900 KRW to 1,000 KRW. Additionally, in September last year, Hana Card raised financial service fees to 1,000 KRW for ATMs and CDs operated by Korea Seven, HanNet, Cheongho Easy Cash, and ATM Plus.

The fee increase was made at the request of VAN companies facing increased operating costs due to reduced ATM and CD usage caused by decreased cash demand and increased use of simple payment methods. All ATM and CD fees are collected by operators such as Korea Electronic Finance and HanNet. In fact, banks are steadily reducing the number of ATMs and CDs they hold as usage declines. According to the Bank of Korea, the number of bank ATMs installed in 2019 was 55,800, nearly 20% less than the record high of 71,000 in 2013.

Although the fee increase was due to the deteriorating business conditions of VAN companies operating ATMs and CDs, the burden on customers using cash services is expected to grow. Since cash services are mainly used when urgent funds are needed, this increase may pose a burden especially on middle- and low-credit users, who are the primary users of cash services.