ATM foreign fees and cash withdrawals

Magnac, Thierry (2017) ATM foreign fees and cash withdrawals. Journal of Banking and Finance, 78. pp. 117-129.

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Official URL: http://tse-fr.eu/pub/31530

Abstract

We evaluate the impact of “foreign”fees paid by consumers on their cash withdrawals at automatic teller machines (henceforth ATMs). These so called foreign fees are paid when consumers withdraw cash from ATMs which are not owned by their home bank. We take advantage of a natural experiment whereby (non linear) foreign ATM fees in one specific bank became suddenly applicable at one point in time. We also use this experiment to evaluate the substitutions between foreign ATM withdrawals and other home ATM or desk withdrawals as well as with payments by card. Using panel data on accounts, we first estimate average treatment effects on the treated before carrying on with the estimation of a simple structural model. The latter procedure allows us to compute the counterfactual impacts of changing the schedule of foreign fees. Impacts are sizeable on bank profits and consumer welfare.

Item Type: Article
Language: English
Date: May 2017
Refereed: Yes
Uncontrolled Keywords: Cash holding, Policy evaluation, Costs of means of payment, Treatment effects
JEL codes: C21 - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
D12 - Consumer Economics - Empirical Analysis
G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 21 Mar 2017 10:33
Last Modified: 07 Mar 2018 13:24
OAI ID: oai:tse-fr.eu:31530
URI: http://publications.ut-capitole.fr/id/eprint/23196

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