Local banks defend foreign ATM fees
Fund-transfer firms charge more
- Published: 11/05/2009 at 12:00 AM
- Newspaper section: Business
Despite recent fee increases, ATMs are still the cheapest, most convenient way to access foreign bank accounts from Thailand, according to local bankers.
Using ATMs is still the easiest means for foreign cardholders to get cash, say local bankers.
Since last month, Thai banks have imposed a 150-baht transaction fee for ATM withdrawals from overseas accounts. Bankers say the fees cover transaction costs charged by network providers MasterCard Worldwide and Visa Worldwide.
Adisorn Sermchaiwong, an executive vice-president at Siam Commercial Bank, said that even with the new transaction charges ATMs remain the most convenient and lowest-cost option for international fund transfers.
"The fees are in line with those charged worldwide, and also in line with the higher operating cost carried by local banks," he said.
Over recent years, local banks have raised their fee-based income by increasing charges for several services including domestic ATM withdrawals and transfers, paying utility fees and other account services.
Local bankers also claim that transaction costs imposed by international issuer banks, after being absorbed for years by local banks, are now simply being passed on to customers.
"A charge of 150 baht is equal to around 4. The rate charged should not have a significant impact on customers, especially if you consider the convenience of being able to access more than 10,000 ATMs around the country," Mr Adisorn said.
And compared with the alternatives, ATMs remain significantly cheaper.
Fund transfer services such as Western Union and MoneyGram impose significantly higher charges for transfers.
Transferring 20,000 baht from the US to Thailand through MoneyGram, for instance, would cost $15, or 2.5% of the total cost of $597.50, according to MoneyGram's website and based on an estimated exchange rate of 34.334 baht to the dollar.
Western Union charges 1,450 baht for transfers from 20,000 to 25,000 baht, a charge of nearly 6%.
The advantage of both MoneyGram and Western Union is that recipients do not need a local bank account.
A cheaper option, but significantly less convenient, is to cash a foreign bank demand draft at a local bank. Fees range from 100 to 150 baht per transaction. Traveller's cheques are another option, although exchange rates may be less favourable than other options.
For larger transactions between banks, direct fund transfers through SWIFT, the global banking network, are preferred. Siam Commercial Bank charges a 0.25% fee of the transfer amount, with a minimum fee of 200 baht and a maximum of 500 baht.
But fund transfers require a recipient to have a domestic bank account, which under central bank regulations requires the possession of a work permit.
Tohphan Tuchinda, head of corporate affairs at Citi Thailand, describes ATMs as still the most convenient means for foreign cardholders to access cash.
"Other fund transfer channels also impose charges, and sometimes require official documents to comply with regulations imposed by financial institutions and the central bank," he said.
In any case, the Thai Bankers Association is reviewing the recent fee hike for ATM withdrawals in light of complaints by expatriates.
Bangkok Bank senior vice-president Teera Aphaiwongse said the bank would be willing to cut its charges for foreign cardholders if MasterCard Worldwide and Visa Worldwide were also willing to lower their interchange fees.
About the author
- Writer: SOMRUEDI BANCHONGDUANG
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