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Banks at odds over max ATM fees

German banks continue to bicker over how to meet federal regulator demands to reduce exorbitant cash machine fees by August 31, a media report said on Wednesday.

Banks at odds over max ATM fees
Photo: DPA

The country’s savings banks, credit unions and private banks are unlikely to present a common solution by the deadline set forth by the Federal Cartel Office, insiders told financial daily Handelsblatt.

The watchdog has for months been reviewing cash machine withdrawal fees, which average €5.64 but sometimes reach up to €10 in Germany, even though experts estimate each transaction costs the bank only €0.63.

These fees are high compared with other countries, particularly for customers using an ATM belonging to another bank with whom their own bank does not have a partnership.

In July the Federal Cartel Office formally rejected a €5 fee limit by the banking associations, telling them the amount was still too high.

According to Handelsblatt, the central credit committee (ZKA) plans to meet again on August 25, but experts aren’t expecting results.

“No one really believes that it will come to a collective position there,” a ZKA member told the paper.

Private banks, savings banks, and credit unions all have different ideas, the paper reported.

Private banks want to cap ATM fees at €2, but savings banks and credit unions want no limits, saying that banks should only be required to inform customers how much they would be charged.

If the ZKA fails to come up with a new fee limit scheme, the Federal Cartel Office has threatened to investigate banks for anti-trust violations.

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BANKING

German online bank N26 shutters US service

German online bank N26 said Thursday it was closing its operation in the United States next year, as regulators in Europe place the "fintech" start-up under increased scrutiny.

The N26 logo on a bank card.
The N26 logo on a bank card. Photo: picture alliance/dpa | Christophe Gateau

N26’s 500,000 customers in the US would be able to use their services until January 11th, 2022, the bank said in a statement, after which it would cease to operate in a market it first entered in 2019.

Instead the Berlin-based operation would “sharpen its focus on its European business”, where it already operates in 24 countries and is exploring expansion into more eastern European markets.

N26 said it would also look to launch new “investment products in the coming year” to sit along side its current account service.

Founded in 2013, N26 offers free, online-only banking services to around seven million clients and is one of Germany’s most high-profile financial technology or “fintech” firms.

In October, the bank raised $900 million from private investors, and announced a plan to hire a further 1,000 employees to reinforce its product development, technology and cybersecurity teams.

READ ALSO: German online bank N26 to create 1,000 jobs

At home, N26 has been in the crosshairs of the German banking watchdog BaFin since 2018 after a local news media investigation found that it was possible to open account with forged IDs.

Earlier in the month, the regulator said it was upping its oversight operations at N26, appointing a special representative to monitor the bank’s progress towards solving issues in “risk management with regard to IT and outsourcing” identified by BaFin.

The regulator also limited the number of new customers N26 could take on to 50,000 a month until the shortcomings were addressed.

N26 was already being monitored by BaFin over failures in the start-up’s anti-money laundering system.

BaFin issued N26 with a 4.25-million-euro ($4.8-million) penalty earlier this year in connection with around 50 “suspicious transactions” the bank failed to report promptly enough.

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