RBI hikes ATM interchange fee
The Reserve Bank of India (RBI) on Thursday increased interchange fee for ATM transactions from Rs 15 to Rs 17 per financial transactions and from Rs 5 to Rs 6 for non-financial transactions, effective August 1, 2021.
The charges were last revised in August 2012.
To compensate the banks for the higher interchange fee, the RBI has increased the ATM charges per transaction for customers from Rs 20 to Rs 21 from January 1, 2022, over and above the free transactions permitted.
The interchange fee
is a
Banks to increase the ATM transaction charges from ` 20 to ` 21 from
January 1, 2022
fee paid by the card issuing bank to the operator/bank of the ATM when a customer makes a transaction at an ATM that does not belong to the card issuing bank. While the card-issuing bank is called the issuer, the latter is called an acquirer. This charge is divided between the acquirer and the company maintaining the ATM, a reason why banks discourages customers from using other banks’ ATMs.
Industry players
welcomed the move. Rustom Irani, MD & CEO, Hitachi Payment Services, which provides ATM services, said, “We are grateful to the RBI and the government for this progressive step of increasing the interchange rate. This will help us...deploy additional ATMs which are particularly needed in semi urban and rural locations to provide financial access and enable financial inclusion.”
Pranay Jhaveri, country manager-India & South Asia, Euronet Worldwide said, "This move will definitely give a fresh impetus to deployment of ATMs across India and help improve the penetration.”