Fee Restrictions on Non-bank ATMs in Israel May Cripple Private Owners

Only 20% of cash withdrawn in Israel is taken from private ATMs. Owners say their withdrawal fees are lower than Western countries worldwide

A privately owned ATM in Israel with a sticker that reads, "This device serves members of all banks."
Eyal Toueg

Coalition whip David Bitan announced last week that he would submit a bill to limit non-bank ATM fees to 2%, or 3 shekels ($0.85). Private ATM owners claim that such a move would cripple them.

While non-bank ATMs, which are mostly run by Casponet, outnumber branch ATMs 2-to-1, only 20% of cash withdrawn in Israel is taken from them. Non-bank ATMs charge fees of 3 to 7 shekels per transaction while remotely operated bank ATMs tend to take 6.5 shekels. Bank ATMs typically charge 1.50 shekels for withdrawals.

Casponet, which is partly owned by Israel Discount Bank and Cal, operates 3,100 ATMs out of a total 4,475 privately-run ATMs in the country. The number of such ATMs jumped 74% from 2012 and they have become more convenient with the closure of bank branches. There are less than 1,700 bank branch ATMs in Israel, with another 400 ATMs remotely operated by the banks. Israel’s private ATMs are still far cheaper than their American counterparts, which can charge $4 to $5 per transaction, or European ATMs, which take 5 to 8 euros.

Private firms argue they need higher fees to operate because their ATMs are used less and they must share their revenue with other partners.

The Bank of Israel’s supervisor of banks allowed the introduction of private ATMs in 2005. However, the non-bank ATM market has never been regulated as the traditional ATM market has.

Former supervisor Yoav Lehman said he believed the private ATMs are justified because Israel had one of the lowest ATM rates in the Western world. He rejected criticisms that residents in the country’s periphery are being gouged, saying that as a result, more bank branches have opened in those areas, and in any event it’s better than the old days, when “the alternative was to take a bus to the nearest branch.”