ATM Surcharges: Effects on Deployment and Welfare

23 Pages Posted: 13 Oct 2009

See all articles by Ioana Chiovenanu

Ioana Chiovenanu

Brunel University London

Ramon Fauli-Oller

Universidad de Alicante - Department of Economic Analysis; Centre for Economic Policy Research (CEPR)

Joel Sandonís

Universidad de Alicante

Juana Santamaria

affiliation not provided to SSRN

Abstract

This paper analyzes the effects of ATM surcharges on deployment and welfare, in a model where banks compete for ATM and banking services. Foreign fees, surcharges and the interchange fee are endogenously determined. We find situations in which surcharges are welfare enhancing. Under strategic fee setting, the increase in deployment caused by surcharging might compensate the surplus loss caused by the increase in prices.

Suggested Citation

Chioveanu, Ioana and Fauli-Oller, Ramon and Sandonis, Joel and Santamaria, Juana, ATM Surcharges: Effects on Deployment and Welfare. The Journal of Industrial Economics, Vol. 57, Issue 3, pp. 613-635, September 2009. Available at SSRN: https://ssrn.com/abstract=1486864 or http://dx.doi.org/10.1111/j.1467-6451.2009.00385.x

Ioana Chioveanu (Contact Author)

Brunel University London

Kingston Lane
Uxbridge, Middlesex UB8 3PH
United Kingdom

Ramon Fauli-Oller

Universidad de Alicante - Department of Economic Analysis ( email )

E-03080 Alicante
Spain
+34 96 590 3400 (Phone)
+34 96 590 3614 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Joel Sandonis

Universidad de Alicante ( email )

Campus de San Vicente
Carretera San Vicente del Raspeig
San Vicente del Raspeig, Alicante 03690
Spain

Juana Santamaria

affiliation not provided to SSRN

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