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Why Would You Waive the A.T.M. Fee?


While traveling through Istanbul, I noticed numerous free-standing kiosks with several (as many as six) A.T.M.’s — each from a different bank. This struck me as being bizarre. A Turkish economist said that some of the banks even let you withdraw from your account using a competitor’s A.T.M. at no extra charge.

Why would these joint locations exist? Why advertise for each other this way?

One possibility is that it’s an issue of monopolistic competition; as with multiple gas stations on a corner, people expect to find A.T.M.’s at certain locations, so each competitor has to locate in these places. Another possibility is that there are economies of scale in servicing the A.T.M.’s. Perhaps several banks use the same armored service to insert cash, in which case each bank would lower its total cost by locating at the same place.

Of course, neither story explains why I’ve never seen this in any other country.

(Hat tip: Oya Pinar Ardic)