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.
Ex: User withdraws $50. Machine charges $5 fee, and gives a $2 in cashback as part of the withdrawal (cash or gift card?)
You could just give them $55 in cash if you want. This is just a net to any profit you’d have left from the surcharge revenue. It was irreversible by practically all measures, so no real risk. The only issue I ever saw cause a reversal is a mechanical vend error.
I think the main thing is you have to properly notify the cardholder what shape their outflow will take and that the cash value is the same. At the end of the day, it’s just a vending machine.
