Business Models and Pricing Strategies in the Market for ATM Withdrawals

Guerino Ardizzi () and Massimiliano Cologgi ()
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Guerino Ardizzi: Bank of Italy, DG for Payments & Market Infrastructures
Massimiliano Cologgi: Bank of Italy, DG for Payments & Market Infrastructures

Journal of Financial Services Research, 2025, vol. 68, issue 2, No 4, 283-309

Abstract: Abstract Automated Teller Machines (ATMs) play a crucial role in retail banking as they represent the primary cash access points for customers. However, the ongoing digitalization of retail payments has put pressure on the ATM industry, raising concerns about its sustainability. We describe the main business models adopted in Europe by ATM service providers, with a focus on their pricing strategies and profitability. We then estimate the price elasticity of the demand for cash withdrawals with a partial adjustment model using data on a panel of Italian banks from 2015 to 2020. Our results show that an increase in disloyalty fees would reduce withdrawals from other banks, leaving the overall demand essentially unchanged. This outcome may reflect a potential shift of consumers towards withdrawals from their own bank as well as cheaper alternative distribution channels.

Keywords: Payment instruments; Interchange fees; ATM fees; Price elasticity; Cash withdrawals (search for similar items in EconPapers)
JEL-codes: E41 E42 G21 G23 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10693-025-00443-3

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