Rise of the ATM Machines

As various so-called reforms get passed by Congress, banks devise new schemes to get more fees out of consumers. ATMs have been a good source for much of the pillaging, and though banks have routinely opposed payday loans, their fees for accessing your money through an ATM are usurious enough to make payday lenders blush.

Paying through the nose
The FDIC found that if you overdrew your account by $20 from using an ATM and the bank charged you an average of $27 for doing so, it equated to an APR of $3,520%! And a $2 fee for withdrawing $20 works out to a 260% APR.

Now banks are lining up to make it even more expensive. Typically $20 has been the minimum amount you could withdraw from an ATM, but JPMorgan Chase rejiggered its next generation machines to allow withdrawals of $1 bills. Over the past year or so, some 400 such machines have debuted and it will double the number available by the end of 2013. PNC Financial has similarly reworked half of its 7,200 ATMS to allow them to dispense $5 and $1 bills,

Considering the ATM transaction costs the bank far less than what it would if you used a real teller, the persistence and growth of ATM fees has become a cash cow for the banks. Certainly there's an argument to be made for paying for the convenience of 24-hour access to your money, but the consumer can also rack up a costly bill if he or she is not paying attention.

Rise of SkyNet
Which makes Wells Fargo's new ATM personalized interface something of a worrisome advance even as it seeks to enhance a customer's experience.

Based on your history with the ATM, you'll get a snapshot of your account balance (though I'm guessing this won't be a feature for non-Wells customers and it will continue charging a $2 fee to get your balance) along with one-click buttons for what you mostly do at the ATM. Are you constantly taking out $60 at a pop? You'll have that button right on the home screen. It will even track how much you've taken out via ATM transactions. You can also set limits on how much you want to take out in a given period.

Simplicity is a worthy goal, and you shouldn't have to jump through hoops to get at your money. Of course, you shouldn't have to pay so much to get it, either.

Know me better than my wife
Wells expects the new interface to be available on all of its 12,000 or so ATMs by next month. While the development is part of its "ATMs Know You Better" campaign and is a more positive technological advance than spewing out $1 bills -- and cheaper for the consumer -- this smart technology that changes based on your habits almost brings out the Luddite in me as I'm sure we'll be paying for this interface through some fee or another.

Take that to the bank
The big banks may be rushing to renew their focus on traditional banking, but well-run regional banks like PNC Financial are already there. PNC saw its share of hardships during the financial meltdown, but its management team thinks the bank is now back on track and ready to deliver for investors. Does this mean it's time to buy PNC? To help you figure that out, one of The Motley Fool's top banking analysts has authored a brand-new premium research report, delving into everything investors need to know about PNC today. To claim your copy, simply click here now for instant access.

The article Rise of the ATM Machines originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of JPMorgan Chase, PNC Financial Services, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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