cbc.ca

ast Updated Mon May 27 15:19:35 2002

OTTAWA– No-name, or white-label banking machines, may be charging even more per transaction after July 1. The federal government plans to levy the GST on all transaction fees at privately owned automated banking machines (ABMs).

“The Interchange Fee is a financial transaction, it’s supposed to be GST-exempt,” Mischa Weisz, president of TNS Smart Network, told CBC News Online. TNS is the largest white-label company in Canada.

“(The) interchange, like surcharges, should be exempt from any taxation.”

* MARKETPLACE: ATM Fees

* MARKETPLACE: White Label ATMs

The Interchange fee is the amount a bank pays out to allow their cardholder to use a machine that’s not their own. In other words, the banks pay 75 cents per transaction to the white-label companies and that’s the amount the GST will be charged on.

Weisz predicts consumers will be hit by higher surcharges by the banks for their transactions.

“The consumer will pay more for access to funds from their own banking accounts.”

White-label machines came on the market in 1996, when the federal government lifted restrictions on who could provide ABM service. Some are even owned by chartered banks.

* FROM MARCH 5, 2002: Watchdog warns of high fees at independent bank machines

White-label ABMs constitute a third of the 35,000 bank machines in Canada. They charge anywhere from 95 cents to several dollars per withdrawal. Many exist in gas bars or convenience stores.

With white-label machines consumers actually pay twice: an Interac fee that goes to the bank and then another fee, typically $1.50, shared by the retailer and the machine provider.

Bar owners and retailers like ABMs not only because they get a cut of the surcharge, but the machines draw customers and encourage spending.

* FROM NOV. 19, 2001: Debit machines charging extra fees

White-label machines are unregulated. Some of them have signs saying “Use At Your Own Risk.”

Consumer groups have been lobbying to have more restrictions put on white-label machines. They’d like to see Interac involved.

Interac operates and regulates the network that connects ABMs to the banks, but it doesn’t require the white-label operators to be Interac members.

Michael Janigan of the Public Interest Advocacy Centre says the no-name machines are gouging consumers.

Written by CBC News Online staff

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