Is There a Customer Relationship Effect from Bank Atm Surcharges?

35 Pages Posted: 11 Nov 2008

See all articles by Nadia Massoud

Nadia Massoud

Melbourne Business School, University of Melbourne

Anthony Saunders

New York University - Leonard N. Stern School of Business

Barry Scholnick

University of Alberta - Department of Marketing, Business Economics & Law

Multiple version iconThere are 3 versions of this paper

Date Written: July 2003

Abstract

This paper investigates the use of ATM surcharges as a sategic device to increase bank profitability. We show that ATM surcharge changes can have both a direct effect on bank profitability and an indirect effect via customer switching and a related customer relationship effect. That is, customer switching results in an increase in the demand for other services provided by the surcharge increasing bank. Using unique data bases, we provide evidence to show that overall bank profitability is favorably affected by surcharge increases. We also show evidence supporting the existence of an indirect effect, especially for larger banks.

Suggested Citation

Massoud, Nadia and Saunders, Anthony and Scholnick, Barry, Is There a Customer Relationship Effect from Bank Atm Surcharges? (July 2003). NYU Working Paper No. FIN-03-020, Available at SSRN: https://ssrn.com/abstract=1299389

Nadia Massoud (Contact Author)

Melbourne Business School, University of Melbourne ( email )

200 Leicester Street
Carlton, Victoria 3053 3186
Australia
+61 3 9349 8130 (Phone)
+61 3 9349 8136 (Fax)

HOME PAGE: http://mbs.edu/facultyresearch/facultydirectory/Pages/NadiaMassoud.aspx

Anthony Saunders

New York University - Leonard N. Stern School of Business ( email )

44 West 4th Street
9-190, MEC
New York, NY 10012-1126
United States
212-998-0711 (Phone)
212-995-4220 (Fax)

Barry Scholnick

University of Alberta - Department of Marketing, Business Economics & Law ( email )

Edmonton, Alberta T6G 2R6
Canada

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