In Japan, there is an extra charge of ?100 (about $1.20) if you withdraw cash from an ATM evenings or weekends. One wise-guy friend suggested that perhaps this is to give the capital equipment the same overtime pay as received by workers. Seriously, though, the only possible cost-based justification for this price discrimination in ATM usage is that workers might have to make sure the machines don’t run out of cash at those times, and their labor requires overtime pay. But surely the same thing is true in the U.S. and Europe, and I don’t see this ATM surcharge there. A more likely explanation is demand-based price discrimination – the banks realize that people have fewer alternatives (no bank tellers available) at those times and price accordingly. Maybe – but the biggest cost to banks is tellers’ time, so I should think that they would do anything to encourage ATM usage, regardless of time of day or week.
Do Japanese ATMs Price Discriminate?
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Even harder to understand is that most ATMs in Japan close every day. Sometimes as early as 7:00 PM. To this day, I have never heard a logical reason why an Automated Teller Machine would ever need to be “closed”.
This is indeed offer and demand but not moral or ethical. It is about people being forced by lifestyle (work vs. off-work hours) or being careless (lowered resistance to economic exploitation due to lateness, drunkeness) to surrender to convenience irrespective of the high cost (the illusion is that it is not a large amount marginally to the individual). More service from your friendly banker. Take it from me: I used to work for a Japanese bank in Japan. But, to be fair, pretty much, the vast majority of banks, no – make that corporations – anywhere will play a variation of that hand. Of course, there is a growing disconnect between customer need and corporate greed. The momentum is building everywhere, not just in Japan. Entropy is upon us, consumers, and it will get much worse, no doubt.
Price discrimination means different prices from the same provider, does it?
Who is/are NOT discriminated by the same bank when using ATM at weekend in Tokyo?
I found that many Japanese ATMs actually closed at around 7pm! This astonished me, since the main use of ATMs seemed for me to be 24-hour access. The machines themselves tended to be very advanced (compared with the ones I’m familiar with in Ireland). No good if they’re closed, though!
It was especially puzzling considering the very widespread use of public vending machines. In the middle of night I could buy booze from vending machines on the street, but sometimes not find any open ATM to get money to do so.
I think it’s a lot simpler than that.
Because they can.
They are shifting some demand from evenings to workhours. This means they need to leave less money overnight. Money left overnight has a (security) risk and an opportunity cost. But these are so minimal that the charge isn’t justified. Most customers won’t go into the maths to figure that out, so banks don’t care if a few get angry.
Another possible explanation is that this is a “new” and “unusual” service so people there don’t take it for granted, so banks can get away with charging more in the beginning using whatever reasons (like eg night buses in London). THis will be until one of the banks will try to get a bit more market share and start offering it for free.
Per 6 above and others, I think the answer is some notion of public morality. You shouldn’t be getting cash at 2AM, is the thinking, you should be home sleeping, and if you do need cash it’s probably for drugs or sex or something similarly unseemly.
To talomown:
It’s price discrimination in that the same product (access to your cash) is given different prices at different times– during business hours or after hours.
The same way that matinee movies are typically priced cheaper than evening movies. You’re consuming the same product.