or a tighter loop I can't grasp how it would work with your account?
I kept a small amount in the consumer accounts. Maybe $300-500. The cash took 2-3 days to do the loop if I recall. And this allowed me to keep do multiple $20 withdrawals each day on each account.
It got big enough that I employed someone to sit at the ATM and make transactions. Then I bought 2 more ATMs so they could multitask / reduce idle time during the 1 minute it took for the machine to process and dispense.
I stopped it when I realized the numbers were getting kind of big and a few banks had caught on and closed my accounts. Then because of the physical cash, I was worried about getting robbed. I was getting very paranoid about the whole thing and decided to wrap it up. I remember meeting a few times with attorneys during it to get varying opinions. Over time, the advise turned into "we think it's legal, but you should really stop it".
There was also another smaller but pretty invisible loophole I found with interchange. I could set the surcharge to $0 and so long as the cardholder bank didn't charge "foreign ATM fees" then I'd make about $0.50 per transaction. Much smaller, but order of magnitude more banks offer this feature versus the surcharge rebate feature. The surcharge and the rebates were line items on the bank statements. So, any person at the bank that looked at my account could see the fees and that it was costing them money. With this hack, there was no line item on my bank accounts (only the amount withdrawn). So it looked like the ATM owner did not benefit at all. But, in the background the ATM owning entity received ~$0.5 per transaction of interchange fee.
It sounds stupid, but at the time, my idea was to test this out and then sell a 'get rich quick' style ebook explaining how it works.
If I remember correctly I had some vague knowledge that basically anyone can own an ATM and set the surcharge as they want. I probably looked into it as a passive income stream at some point (these things had a high growth phase some time ago). Then I think the first time I heard about ATM rebates was on an advert of some sort and the whole thing seemed obvious. So I looked into the fine print and it seemed to check out.
I don’t think this was ever a thing until online banks came around during Web 1.0 , traditional banks would charge you a fee for using out of network ATMs (which is still pretty standard), but the online banks resorted to offering surcharge rebates as a way to compete with brick and mortar banks. And also to overcome the obvious pushback of people wanting quick access to their cash. Then smaller banks started offering it as a way to compete with the national banks that have huge ATM networks.
