Finding an ATM could get harder as thousands of small businesses avoid making upgrades

Thousands of independent ATMs — those grungy machines you see in backs of bars and corner groceries — are about to disappear thanks to payment-processing rules going into effect starting this October and rolling out over the year.

Starting October 1, MasterCard is requiring that owners of ATMs in private businesses assume liability for fraud if their payments systems aren't up to date. Visa will also start holding merchants accountable, but not until next year.


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That will mean upgrading machines to be compliant with the new chip cards that payment processing companiesbegan rolling out en masse last year. MasterCard researchers estimate that chips reduce the costs of fraud by 54%.

Roughly half of the 400,000 or so ATMs in the country are operated by private businesses, which industry officials told Marketwatchare less likely than banks to maintain the latest payment technology.

Problem is, upgrading ATMs can cost up to thousands of dollars.

If the cost of making the changes outweighs what owners are making off of ATM fees, then they'll have little incentive to actually switch their machines —and some may just do away with them entirely.

Finding an ATM could get harder as thousands of small businesses avoid making upgrades
Starting in October, vendors could be liable if their ATMs aren't compliant with the new anti-fraud chips.
Source: Matt Rourke/AP

Experts told Marketwatch they expect that anywhere between 10% to 15% of the total number of ATMs in the country won't be upgraded, meaning that owners will either take those machines out of commission, or just leave them up and hope that no debit fraud happens on their watch.

Now, fewer indie ATMs could be a good thing for your wallet, as it'll force you to use your bank's machines — which won't charge you a fee to take out cash. Out-of-network and third-party ATM fees have risen sharply over the last five years, climbing 21% to average more than $4.50 per withdrawal. One industry official told Today these charges can add up to $200 to $300 a year for typical consumers.

The problem, of course, is convenience: If you don't have an ATM or bank branch nearby, the decreased availability of non-bank ATMs could be a nuisance.

RELATED: 10 purchases you shouldn't make with a credit card

10 purchases you shouldn't make with a credit card
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10 purchases you shouldn't make with a credit card

#1: Household bills

If you are already cutting it close for the month, you may be tempted to use plastic to pay the utility, cellphone or cable bill. But if you’re not paying off your full balance each month, the interest you will be charged makes those monthly bills even more expensive.

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#2: Cars 

Car dealers often don’t allow credit card purchases, or may limit the amount of the purchase price you can put on your card. Dealers don’t like credit card payments because they have to pay the 1 to 3 percent fee the card company charges to process the transaction.

You could exercise the cash-advance option. But you’ll pay a fee and a higher interest rate. Also, you won’t get a grace period on the interest — it will begin to accumulate right away.

Instead of using a card, go to a credit union or bank to get financing approved at a reasonable interest rate before shopping for a car.

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#3: Student loans

If you can’t afford to pay your federal student loans, you have options. They include an income-based repayment plan, deferment, forbearance and possibly loan forgiveness. Take a look at “How to Get Free Help With Your Student Loans” to learn more.

Paying your student loan debt with a credit card increases the amount of interest you’re paying on the debt. Even if you have a zero-percent introductory credit card offer, it will expire in time.

And while the federal government will accept a credit card payment for loans in default, many student loan servicers won’t allow this form of payment.

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#4: Retail therapy

Think a new purchase will cheer you up? Perhaps. But remember that cash is king if you choose this mode of “therapy.” Use cash, and you won’t let your credit card balance spiral out of control.

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#5: Medical bills

If you use a medical credit card available through your health care provider’s office to pay bills, be careful to read the fine print about your obligations.

Also consider steps you can take to reduce health care costs. See “10 Ways to Fight High Medical Bills.”

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#6: A night on the town

Handing your credit card to an unscrupulous waitperson equipped with a skimming device isn’t your only worry. If you’re out on the town throwing back drinks, it’s easy to run up a tab you can’t afford.

So when painting the town, it’s best to pay with cash.

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#7: Big-ticket items you can’t pay off immediately

Credit cards offer great purchase protections and should be used for many big-ticket purchases. But buying something on credit when you can’t afford to pay it off right away isn’t smart.

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#8: Credit card payments

You can’t charge your monthly credit card payment on another credit card. But perhaps you’ve been tempted to use a cash advance from a credit card to bolster your checking account so that you can pay other bills.

We’ve already explained the folly of cash advances. Your credit card is not an ATM and should not be used as one.

There are real benefits, however, to transferring high-interest credit card debt to a new card with a generous zero-percent balance transfer offer. Just be aware of the balance-transfer fee and find out how long the offer lasts.

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#9: ‘Sale’ items

Convinced that you might miss out on savings if you don’t purchase a specific item on sale right away? That’s one of the warning signs of an impulse buy.

Wait a day and think about whether you really need the item. Nine times out of 10, the answer will be “no.”

You aren’t saving money by spending it for something you don’t need.

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#10: Unsecured online purchases

When shopping online, make sure the web address has “https” at the beginning. If it doesn’t, that’s your cue to take your online shopping elsewhere.

In fact, do your homework before purchasing anything online to make sure a company is reputable and not the source of many consumer complaints.

Which purchases do you refrain from making with your credit card? Let us know in the comments below or on our Facebook page.

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Perhaps not coincidentally, this morning the payment app Venmo rolled out its first major promotional effort with a series of advertising buys on MTV and Comedy Central. In addition to giving people an easy way to pay friends back for a beer, cashless payments are increasingly available from merchants like Munchery and Gametime, and Venmo has discussed plans to move into brick-and-mortar businesses, as well.

Then again, our cashless future is still somewhat distant. Venmo's parent, PayPal, plans on unrolling the new in-store features starting in 2017 at the earliest.

In the meantime, to buy drinks at your favorite cash-only bar, you'll have to take out money the old fashioned way — at the bank.

And if you're lucky (or lazy) enough to still rely on the bodega ATM on your corner, opt for a checking account that reimburses out-of-network ATM fees. Some examples include Charles Schwab's High Yield Investor checking account and Aspiration's Summit checking account. PNC, Ally, and BankFive also offer accounts that reimburse fees, but set limits of $10 to $15 per month.

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