CBC Marketplace: White Label ATMs

Air Date: December 5, 2001
Reporter: Clifton Joseph
Producer: Guy O’Sullivan
Associate Producer: Mike Gordon
Editor: Tony Coleman

More of us rely on bank machines for cash — but many of those machines have changed appearance. It’s a trend that may be coming to an ATM near you — a trend that could cost you more to withdraw your money.

Here’s Toronto poet and journalist Clifton Joseph’s take on the story:

I don t flinch when I confess to you that I penny pinch.

And I don t want to be hit with fees to access my greens which means I stick to my own Royal Bank bank machines.

And that s the problem. I get a rude awakening when I go to stores where there have always been Royal Bank machines: they ve now been replaced by a creature frightening to my finance: a surcharger I can t make deposits, transfer money or pay my bills. All they do is spew cash from their mouth for which I m expected to pay thru the nose.

* Related story: ATM Fees Marketplace, Jan 18, 2000

You know, it s getting downright difficult to avoid these additional dalliances with my finances.

It s increasingly trying, trying to stay loyal to the Royal. Their machines have unceremoniously disappeared from a lot of the places they used to be. In the squared circle

Toronto poet and journalist Clifton Joseph
of streets of my west Toronto neighbourhood, seven Royal Bank machines have gone down for the count their place taken over by these surchargers ATMs, ABMs, white labels, no-names or just plain old cash dispensers.

No matter what their names, they are all after a piece of my pie.

And its no mean mathematical feat figuring out how high my fees will jump when I use these no-name machines.

Surcharge, surcharge, surcharge

First I m hit with the surcharge usually a buck or two. Then there s a disloyalty fee, for using another banks machine another buck and a half. And finally, the fee on my account, which breaks down to about 25 cents.

Three separate charges and three or four dollars just to get at my own dough.

Can t seem to get it out of my mind that I m being nickel and dimed and taken for a ride.

I call my bank and they tell me to hold onto my britches they say they re not cutting back the numbers of their non-branch bank machines.

Still with a suspicious mind, I make a date with the enemy. At a gas station in Brantford, Ontario, sits a newly minted no-name machine, part of Ron Carr s burgeoning network of over a hundred across Canada. And guess what?

“Last year our company did a replacement program with

Ron Carr, SwYtch Delivery Solutions
the Royal Bank where we actually managed the removal of the Royal Bank s machine for them and placed our machine back in the very same day,” Carr said. Carr used to operate the Royal bank’s banking machine network across Canada. He’s now with SwYtch Delivery Systems, a major supplier of white label ATMs in Canada.

Carr says there are good reasons for the bank to want to move into these private label machines.

“Largely it s the economics because we can operate a lower cost model, we can surcharge so there s more revenues. That allows a company like us to give a merchant like this some of the money. The banks have always paid the merchants something, too. But typically it s been on the scale of three or four or five thousand dollars a year. In a very busy location, we re able to pay the merchant three or four or five thousand dollars a month,” Carr said.

Paid for, of course, with all the cash extracted from luckless losers like me.

Royal plug pulled on plum location

And that extra cash clout must explain the machinations at one of the busiest locations in the country Toronto s Pearson Airport where the plug was pulled on eleven Royal Bank machines and 35 white labellers installed in their stead.

I asked airport spokesdude Peter Gregg for the goods on how the deal went down.

“We had a contract that expired with the Royal Bank of

Peter Gregg, Pearson Airport spokesman
Canada. There was an option to renew. They chose not to renew,” he said.

Joseph: You mean that you didn’t actually kick out the Royal Bank of Canada? I mean, Canada’s busiest airport, 30 million people or so coming through a year. Seems like a pretty lucrative market.

Gregg: We certainly did not kick them out, no. The contract expired and we went to a request for proposals and chose from the people who were willing to offer us the service.

To our reporter, that seemed curiouser and curiouser, so

David Moorcroft, senior VP, Royal Bank
he called the bank back and dropped on them some of the details he d dug up. Eventually he was granted an interview with Royal senior VP David Moorcroft.

Joseph: Are you getting out of the off-branch bank machine business?

Moorcroft: No, absolutely not in fact we re aggressively maintaining our market share there. Infact if you look at how many machines we had last year, we have a few more this year.

Which sounds comforting until you look at the figures. The number of Royal Bank cash machines was climbing across Canada until the mid-90s. That s when the surchargers came barrelling along, and the Royal Bank s expansion stalled.

Moorcraft: Every single machine that we ve taken out of one location we ve relocated and put in another location, so those machines aren t disappearing. We ve moved about 200 machines in the last year from one location to another.

Joseph: And they are all located in secret locations around Toronto, ’cause I just haven’t been able to find them.

Moorcroft: You must be wearing those sunglasses again where you can t see the blue and gold of Royal Bank. But as I said, I d be happy to take you around. As long as we re taking the money out of your account, I ll help you use every machine we have here in Toronto.

To put proof in his pudding, I ask for disclosure on the recent closure and subsequent redeployment of 10 machines downtown.

Migrating machines

Soon after an email with my new locations lands on my laptop. The relocated machines are a way aways from my neighbourhood.

They may have started off in downtown Toronto, but now they ve all bolted to the suburbs. The closest is 6km away in Etobicoke, which is great for them, but why does it have to be at my expense? And it only gets worse:

* Scarborough, 20kilometres away
* Richmond Hill, 25 km.
* Brampton, 30km.
* Oakville, 35km.
* Burlington, 45km.

And then the penny drops. Whenever I use someone else s machine I’m lashed with a $1.50 disloyal fee. And the Royal bags half of that. So they get more cash out of my stash if they dash their machines from the scene and let others pick up the slack.

Things look bleak.

And the bleak streak has just hit another peak.

Now I read that the Royal co-owns a company that s about to offer white label cash machine services.

By hook or by crook, the Royal Bank is digging into the nooks and crannies of the surcharging business.

But there s one spot left that, for now at least, is still surcharge-free. Under my mattress.

The buck stops here.