The effects of ATM surcharges on small banking organizations

Effective April 1, 1996, the Cirrus and Plus national ATM networks modified their operating rules to allow ATM owners to impose surcharges on other ba nks' customers who use their ATMs. Since 1996, surcharging has become wides pread and has attracted a great deal of opposition. Among other things, sur charge opponents argue that the imposition of surcharges will cause custome rs to shift their deposits away from small banks that own few ATMs, toward large banks that own extensive networks of ATMs. This article provides empi rical evidence regarding the effects of surcharging on small banks' deposit market shares and profitability.