The privilege of quick cash can come at a price

Banks are not always being explicit to customers over just how much they charge for using rivals' cashpoint machines

The world's cashpoint machine network is rapidly opening up, bringing nearer the day when we can get cash from any machine, anywhere. Britain's banks and building societies have announced several cashpoint sharing arrangements in recent months (the Abbey National and Midland, for example) and others are about to be revealed.

But cardholders should beware. Sometimes using these machines involves charges. But the banks are not always very good at highlighting these costs - it is highly unlikely, for example, that a cashpoint machine will give warning. Customers may only realise they have been charged when they get their next bank statements.

Typically under the new sharing arrangements banks have to pay when customers use the withdrawal facilities of other banks' cashpoints (called automatic teller machines or ATMs), and sometimes the charge is passed on. But the complex nature of sharing arrangements means that it is often difficult to fathom whether you will be charged for using a machine.

Customers of Alliance & Leicester (or its Girobank subsidiary), for example, do not pay for cash withdrawals on the Plus network either abroad or in Britain. Barclays Bank is a member of the Plus network, so an Alliance & Leicester customer might assume that they could make withdrawals from Barclays' cashpoints free of charge. But where an Alliance & Leicester customer's Plus card is used on a machine in the UK that is also part of the Visa network it will always be treated as a Visa transaction, leading to a 1.5 per cent transaction charge. ATMs abroad that are part of both the Visa and Plus networks are only free to Alliance & Leicester customers if the machine happens to route transactions through the Plus system, and there is no obvious way of the user knowing that.

"We tell our customers there may normally be a charge, but not always," said a spokes-man at A&L. He admitted that it was very difficult for a customer to know if a charge would be made for using any particular cash machine abroad that is a member of both networks.

Typically warnings for customers about charges for using other banks' cash machines will comprise little more than a brief note sent out with a statement or a sign in a branch. The Co-operative Bank, for example, recently notified customers on the bottom of account statements that it would now cost 2 per cent, or a minimum of pounds 2, to use Visa or Plus cash machines, unless the machine was also part of the Link network.

Whether there is a charge can also depend on what type of account a customer has. Abbey National has just entered an ATM sharing arrangement with Midland Bank that will usually allow customers of either to use the other's cashpoints free. But Abbey customers who only hold a savings account will be charged for making withdrawals from either an Abbey or a Midland machine.

The Halifax is about to announce its own ATM sharing arrangement with Midland but has not yet decided whether to pass on any charge for the service to its customers.

There are three main card-sharing arrangements in Britain. The Link network, which comprises the building societies and the Co-op and TSB banks, allows shared use of machines but in some cases there will be a charge. Customers also have access to the Plus network overseas, and may not be charged for using these machines. Link says it is about to announce an important expansion in its membership.

The Mint network combines Midland, NatWest and TSB cashpoints. Customers of these banks can use any machines in the network for free. Then there is the 4 Banks arrangement, which allows Barclays, Lloyds, the Royal Bank of Scotland and the Bank of Scotland customers to use each others' machines free. Lloyds and TSB customers can also enjoy free use of each others' machines since the two banks merged.

Other networks are primarily for people travelling abroad and will normally, though not always, mean a fee for use. These are Visa, Plus, MasterCard and Cirrus. Before going abroad, it is sensible to check with the card issuer what charges and what exchange rates apply, and what the daily maximum is for withdrawals.

It might be considered outrageous that the cashpoints themselves do not tell customers, either by a fixed sign or a screen message, what charges they are incurring. The banks say this is technically difficult, because it is up to the customer's bank to decide what, if any, charge is passed on. However, some admit it is not to their commercial advantage to point out that a charge will be made.

Banks are now acutely aware of the cost of their branch networks, and where they are keeping branches open they are keen to maximise use of them. Indeed, this commercial impetus is behind the growing number of cashpoint-sharing agreements that will be announced in the coming weeks and months.

Unfortunately, however, the arrangements can also be so complex and change so frequently that customers may well find that even bank staff do not understand them.

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