Banking On The Poor? Consumers Slam RM1 ATM Fee

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The RM1 ATM withdrawal fee in Malaysia has come under intense scrutiny, with consumer groups and banking advocates labelling it as a regressive burden on the financially vulnerable. 

Based on an Utusan Malaysia report, the fee, reintroduced in February 2022 after being waived during the pandemic, applies to interbank ATM withdrawals. Payments Network Malaysia Sdn Bhd (PayNet), which manages the system, reportedly earned RM271 million in profits from the fee in 2023, raising questions about its necessity and fairness.

Critics argue that the fee disproportionately impacts lower-income groups, particularly the B40 demographic, who rely heavily on cash transactions due to limited access to digital banking services.

J. Solomon, General Secretary of the National Union of Bank Employees (NUBE), stated, “This fee only makes the rich richer, while the poor continue to struggle.” He also noted that even a seemingly small amount like RM1 can quickly become a significant financial strain for families already dealing with rising living costs.

Consumer associations and unions have expressed similar concerns, pointing out that many Malaysians feel exploited when withdrawing their own money, as many low-income earners rely on ATMs for daily cash withdrawals due to limited access to digital banking services.

Mohd Yusrizal Yusoff, President of the Kedah Consumers Association (Cake), called the fee “profiteering,” adding, “Previously, we used ATMs and interbank systems without any charges, yet banks recorded no losses.” He emphasised that this practice harms those who can least afford it.

The reintroduction of the fee has been viewed as counterproductive to financial inclusivity efforts. Advocates, including NUBE, have urged stakeholders like Bank Negara Malaysia (BNM) and commercial banks to either waive the fee or introduce exemptions for low-income groups. 

NUBE further highlighted that the fee accumulates quickly for users withdrawing cash on the go, exacerbating financial challenges. In October, NUBE formally appealed to PayNet’s shareholders, including Bank Negara Malaysia (BNM) and 11 commercial banks, urging them to abolish or exempt this fee for the most vulnerable. 

However, while responses were received, no concrete commitments have been made by BNM or the banks to address these concerns.

Critics argue that the fee runs counter to efforts to promote financial inclusivity and digital adoption in Malaysia. With reports showing that PayNet earned RM271 million in profits from the RM1 fee in 2023, the union and consumer groups have called on banks and regulators to prioritise social responsibility. 

“It is imperative to foster an inclusive banking environment that supports all Malaysians, especially those facing economic hardship,” said Solomon. Suggestions include reinstating the pandemic-era waiver or developing alternative measures that minimise financial strain for the B40 group.

The government is now being urged to intervene decisively. Advocates insist that regulators, particularly BNM, must take the lead in ensuring that the banking system serves as a tool for empowerment rather than a source of inequity.

Without substantial action, critics warn, the RM1 ATM fee risks becoming a symbol of inequality within Malaysia’s financial sector.