Anthony Albanese’s government has urged the Commonwealth Bank to reconsider charging customers a fee if they want to withdraw their own money from branches.
Customers of the bank got a rude shock on Monday when the bank announced it was closing its ‘Complete Access Account’ and changing them to ‘Smart Access Accounts’.
But the new account will include a $3 fee tacked onto every withdrawal from a branch, a post office or phone, starting January 6.
Housing Minister Clare O’Neil unleashed about the decision on Nat Barr’s Sunrise show on Wednesday morning.
‘It doesn’t seem fair or appropriate and this is a huge bank making huge profits. Come on, guys. It’s Christmas. We don’t need this right now,’ O’Neil said.
‘This is not something the bank should be doing and we’re asking them to reconsider.’
Assistant Treasurer Stephen Jones called the surcharge a ‘kick in the guts’.
‘The Government has announced that we will guarantee the right to access and use cash and crack down on unfair surcharge fees for using your own money,’ he said.
Commonwealth Bank has told customers they will need to pay a fee to withdraw cash at a branch
An email sent to customers on Monday detailing the new fee on the Smart Access Account, the Complete Access Account type will be closed
CommBank told Daily Mail Australia it ‘continues to offer customers free cash withdrawals from our national ATM network’.
‘The monthly account fee for the Smart Access account is currently $2 less than the Complete Access account and both accounts offer similar features,’ the spokesperson said.
‘Our Smart Access account has a $3 assisted withdrawal fee. This is our main transaction account and the assisted withdrawal fees on that account have not changed.
‘We continue to offer waivers on assisted withdrawal fees for customers who meet certain criteria including certain types of pension recipients, those who desposit $2,000 a month, and those under 18 years of age.
‘Our Streamline Basic account has no monthly account fees or assisted withdrawal fees and is available to customers who hold an eligible concession card.’
The bank in recent years has remained tight-lipped on whether it is transitioning its branch network, as a whole, to ‘cashless’, with CommBank having opened a number of ‘Specialist Centres’, which do not have tellers to handle physical cash.
The Specialist Centres focus on business and home loan products, credit facilities and merchant services. Meanwhile, customers who are looking to deposit or withdraw cash are directed to either online banking or ATMs.
When the Specialist Centres first started appearing in July last year, this masthead asked if the bank was looking to phase out physical cash and received a response which seemed to sidestep the question.
‘Commonwealth Bank has created a very small number of Specialist Centres in major metropolitan areas, which are designed to support personal and business customers with more complex banking needs,’ a spokesperson said at the time.
‘These Specialist Centres provide customers with face-to-face access to specialist home and business lenders, and also offer the latest self-service technologies. All of our Specialist Centres are in major metropolitan locations and very nearby to full-service branches.
‘We continue to maintain Australia’s largest branch network for customers.’
In August this year, CommBank said it was costing about $350million a year just to keep physical cash in its network and described it as a ‘challenging commercial model’.
However that did little to affect CBA’s bottom line, having made a $9.5 billion profit after tax in the 2023/24 financial year.
CBA subsidiary Bankwest earlier this year announced it would remove physical cash services and transition to a digital-only bank.
Bankwest said it would close 45 of is branches and another 15 regional branches would be converted into CBA locations.
Of the other Big Four banks, ANZ and NAB have also opened branches which do not offer over-the-counter teller services.
Australia’s fifth-largest, Macquarie Bank, has wound down its in-person services and made the switch to a digital only bank as of November 1 this year.
In all cases, the banks have said physical cash transactions represent a small fraction of their business, but there have been concerns raised about switching to digital-only currency.
These include privacy, the fees incurred with tap-and-go payments and the raised risk of hacks, cyber-attacks, and online scams in addition to the reliance on digital infrastructure that could suffer power outages.
Vulnerable people such as those with disabilities, undocumented workers, refugees, victims of abuse and those who live in remote and regional areas are also likely to be disproportionately affected by the loss of cash.
Pictured are workers at a cashless Commonwealth Bank branch in Penrith. Deposits and withdrawals can still be made via on-site ATMs
CBA has also removed more than 800 ATMs from its network.
‘Five years ago, 43 per cent of all point of sale transactions were cash. Today, the figure is around 15 per cent,’ explained CEO Matt Comyn last year.
‘And yet, every week, customers transact more than $18 billion through the CommBank app, an increase of 64 per cent in just two years.’
He said CommBank’s 10million customers were paying roughly $40 each to fund the $400million expense to keep physical cash in circulation in it’s branches.
‘Many of our customers don’t use cash and these customers cross-subsidise those that do,’ he said.
Earlier this year, Australia’s largest cash distribution service, Armaguard, was on the brink of collapse until it received a $50 million bailout from major banks and large retailers in late June.
Despite fewer people using cash, the right to do so should be defended, Reserve Bank governor Michele Bullock said.
Giving testimony to federal parliament’s house economics committee, Ms Bullock said access to cash was ‘a sensitive issue’ as pressure grew in the banking sector and government to dispense with it.
‘There is a minority, but a significant minority, of people who still rely heavily on cash and want to use cash,’ she said.
‘The government is committed, and we are committed as well, to trying to maintain access to cash for people who want to use it,’ she said.
‘This is not just a problem in Australia, it’s a problem around the world as cash use declines for transactions,’ Ms Bullock said.
‘You’ve got all these fixed costs of maintaining a cash distribution system, and with less cash transactions that means the cost per transaction just keeps going up and up – it’s getting uneconomical.’
