CBA delays plans for $3 cash withdrawal fee
The Commonwealth Bank (CBA) has delayed its plans to charge a $3 cash withdrawal fee after backlash from customers and government.
In an email to customers Tuesday, CBA said it would migrate customers with Complete Access accounts to the bank's newer Smart Access account.
While the new account would've incurred a cheaper monthly fee - $4 instead of $6 - a $3 fee would have been charged when a customer withdraws money over the counter at a branch, over the phone, or at a post office from January 6, 2025.
Critics labelled the move as "greedy", with finance minister Katy Gallagher urging the bank to reverse the decision.
"This type of charging and looking at $3 per transaction, I think, it's really hard, and particularly for those customers that have those types of accounts and want to go into the branches," she told ABC News Breakfast.
By Wednesday afternoon, CBA's retail banking services group executive Angus Sullivan said the bank would review its approach to the changes, conceding the bank did a "poor job of communicating".
"We are particularly conscious of the impact any change to planned fees and charges can have at this time of year especially given the cost-of-living pressures our customers face," Sullivan said.
The bank said that 90% of customers it wanted to migrate would have been better off or the same, given the reduction in the monthly fee.
For the remaining customers, CBA says it is pausing the migration and contact the remaining customers who might be worse off over the next six months to discuss the most appropriate product for them.
Stronger regulation on banks
The incident has reignited broader discussions about the future of cash and the role of banks in providing essential financial services.
Critics argue that banks should prioritise accessibility and affordability, particularly for vulnerable customers who may struggle with digital banking.
Julia Angrisano, national secretary of the Finance Sector Union, says CBA's backflip confirms the need for stronger regulation on banks, especially to recognise that accessing cash is an essential service.
"The Commonwealth Bank should never have decided to charge such a greedy fee, especially during a cost-of-living crisis, with high interest rates and rents hurting and with Christmas around the corner," says Angrisano.
Shrinking access to banking services
While CBA prided itself on maintaining the largest branch network, it has copped criticism after closing 354 branches and removing 2297 ATMs over the past five years.
This made it increasingly difficult for CBA customers to access free cash withdrawal services.
Concerns have also been raised about the reliability of digital banking.
A technical glitch in October caused some CBA customers to be charged twice for their transactions, further fuelling fears about the growing dependence on online services.
And while the government has made moves to ensure its mandatory for businesses to accept cash for essential items, the fears of a cashless society are stoked when institutions make it harder to access cash.
"You have no choice... Yet another way to make you go digital," said one Facebook user in response to the cash fee.
Others had voiced their dissatisfaction by threatening to switch banks, although options are limited, as other major banks have similar policies.
For example, ANZ charges $2.50 for staff-assisted transactions, while NAB and Westpac already charge $3. Excluding CBA, the other three members of the Big Four have collectively closed 1092 branches since 2018.
It's also not just the major banks that suffer from the challenges of digital banking. A Reserve Bank of Australia report recorded 532 online banking outages over almost three years.
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