Crandall and Singer Explain Why Regulating ATM Fees Is Bad Public Policy

March 8, 2007

Criterion co-founder Robert W. Crandall and President Hal J. Singer published an op-ed in Canada’s National Post on March 8, 2007. Crandall and Singer argue against regulation of ATM fees, an idea gaining currency in Canada.

Crandall and Singer argue that regulation of ATMs today would be the equivalent of regulating pay-telephones at the dawn of the wireless era. They explain that many transactions that require payment in cash today will not in the future, and thus the demand for ATMs will decline. Nevertheless, the authors explain why it is important to tolerate a positive fee for the soon-to-be-extinct technology: The next generation of payment systems interprets those price signals as an invitation to innovate.

The authors also explain that regulation of ATM fees would raise the banks’ costs of operating ATMs and thus there would be fewer ATMs available to customers. Finally, Crandall and Singer make simple suggestions to those complaining of high ATM fees.

To download a PDF of the article click here.