One time, I needed $300 from an ATM, but this particular ATM had a $200/transaction limit. I took $200 dollars out of my checking account and took my card. Literally a few seconds later, I put my card back in and took the other $100 out with no issues. What is the point of transaction amount limits if they can be circumvented by simply doing multiple transactions?
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8I am wondering a bit about the way your limit is applied. I only know daily limits. Once you withdraw (let's say) 1000€, you are done for the day. This is limiting damage when the card is stolen while your kind of limit is just a nuisance– ManzielAug 24, 2022 at 12:06
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@Manziel but the exact opposite is the case here. This ATM would just require a thief to steal in multiple withdrawels– Jimmy T.Aug 24, 2022 at 15:40
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1@Manziel On the new TV show "Sprung", the protagonist got advice on how to commit crimes from other inmates while he was in prison. One who was teaching him how to commit ATM fraud recommended doing it around midnight, so you can do it twice to get in each day's limit.– BarmarAug 24, 2022 at 16:55
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4Presumably there are engineering factors involved too. The machine will be designed with some upper limit on the number of banknotes that can reliably be handled in a single transaction. Also, transaction limits probably help to discourage customers from making large withdrawals that empty the machine too quickly.– avidAug 24, 2022 at 22:49
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8After being a bank customer for a few decades and collaborating with them for a few years professionally, I have to say that many rules seem to stem from "because that's how we have always done it" or "because it gives our customers an illusion of security", sometimes peppered with "because national regulations require it".– xLeitixAug 25, 2022 at 8:44
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7 Answers
Likely only your bank can answer this for sure, but I think we can make an educated guess as to some reasons for this. All of these ideas assume that it's in the bank's best interest to limit the amount of cash withdrawn from their ATMs, while still maximizing the value of having an ATM in the first place:
- Fees: maybe you aren't paying any fees in this case, but some people might be, and this would be one way to extract addition profits from the ATM (per dollar withdrawn).
- Some people don't know your trick. Even those that do may simply not go through the extra effort to perform an additional transaction.
- In the (hopefully) rare event that someone is being forced to withdraw cash against their will, or their card is stolen, the lower limit may help to protect the victim in the case that the perpetrator doesn't know your trick, or doesn't wish to take the extra time to use it.
Certain account types have a transaction limit per month. For example, a savings accounts may be limited to 6 withdrawals per month.Apparently "Regulation D" is no longer in effect, at least federally, and furthermore it may not have applied to ATM or teller withdrawals anyway.
I also want to draw special attention to user11153's answer which expands upon a very likely motivation being additional Fees, with the subtle distinction that the ATM owner profits per transaction from the banks themselves. Also see jaskij's comment below where one company admitted this exact reasoning.
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3"Some people don't know your trick. Even those that do may simply not go through the extra effort to perform an additional transaction", this seems to make an assumption that it is desirable that people do not withdraw more via the ATM. Why is unclear to me. Aug 24, 2022 at 9:52
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25I'm wondering if ensuring the ATM doesn't run out of cash could be another reason, especially those in high-traffic areas. Aug 24, 2022 at 11:02
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2"but some people might be" and even if you aren't paying any fees personally, it is likely that your bank is paying some kind of fee to the ATM operator. ATM operators don't work for free. Aug 24, 2022 at 13:28
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3Family used to work in the banking industry and fraud was the #1 reason. So if someone has your card & your pin, they can't empty your account. Usually, there's a daily limit on top of the per transaction limit. Aug 24, 2022 at 19:14
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3@technogeek1995 That's good info regarding daily limits in general, but may not be relevant to this particular question. Note this question has a subtle difference: Why is the transaction limit lower than the daily limit if you are allowed to make multiple transactions in a row? I covered a similar angle in point #3, and it's possible that it's the top reason here as well.– TTTAug 24, 2022 at 19:33
It's rather common for an ATM to only be stocked with $20s and lower (or even with nothing but $20s). That means your $200 transaction limit might actually be a more customer-friendly way of saying the machine has a limit of 10 bills per transaction.
The ATMs that I've used in recent memory all used the same type of bill dispenser mechanism. A little panel opened and bills were fed halfway out, propelled by rollers above and below. Those rollers also held the bills in place until you took them. That style of mechanism will naturally have a limit as to how far the rollers can spread apart and thus how thick a stack of bills they can dispense. Going over that limit means the bill feeder could jam, disabling the machine or shredding your cash. Also, the rollers are made of high-friction rubber but a well-used bill can be rather slick. If the stack gets too high and the rollers can't squeeze hard enough to keep the bills in the center of the stack in place, then some of your bills could fall out of the machine or blow away in the wind.
I have a feeling this is one reason for the limit because you'll get a similar limit when you try to deposit something at an ATM. Deposits are fed into the machine by a feeder that looks just like the output feeder. Some units even use a single slot that does double duty. When you tell the machine you want to make a deposit, it will typically say that you can deposit multiple items at once but you can only deposit X number at a time. I made a deposit the other day and do you want to guess what it told me? "Deposit up to 10 checks or bills at a time".
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1Good thinking! But even if it’s a physical limitation of the dispenser mechanism: They could just solve it in software by asking you to remove the money, then dispensing a new stack of bills without starting a whole new transaction.– MichaelAug 25, 2022 at 10:59
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1@Michael but the machine can also only hold so many notes in the first place. Incidentally here where we've recently switch to polymer notes, the limits haven't changed but they no longer come out in a nice neat stack, and aren't held so securely by the rollers– Chris HAug 25, 2022 at 11:03
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Interestingly, I found an article stating that in Poland ATMs had a limit of 30 to 40 notes, before the transaction limits got lowered.– jaskijAug 25, 2022 at 14:57
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This is certainly plausible. I feel like for decades most of the ATMs I've used have happily handed out 20 or more bills, but who knows- maybe newer technology can't handle it anymore. (Hehe- just kidding. More likely it's different ATMs using different technology or maybe reducing the number of bills lowers the likelihood of a sticky bill getting undetected, etc.)– TTTAug 25, 2022 at 15:17
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In Tanzania, the usual limit on ATMs is 400,000, and it's given out in 10,000 bills (there are no higher ones). Means usually you get 40 bills at once. Aug 25, 2022 at 23:53
i used to work for an institution that did this. it was because the per-transaction limit and the per-day limit were controlled in separate systems. they could raise the per-day limit on the card easily on the central server, but could not raise the per-transaction limit on all the atm's for technical reasons because it was stored in a decentralized way. so they raised the per-day limit, but left the per-transaction limit in place.
answered Aug 24, 2022 at 19:35
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1Good info! This implies that originally they were probably the same limit. I then wonder why the per transaction limit is even needed at all? Wouldn't the daily limit block the transaction on its own?– TTTAug 24, 2022 at 19:52
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4@TTT The user-experience of "The ATM tells me I can only take out $200" is much better than the user-experience of "The ATM lets me take out however much I want, but if I try to take out too much I get a weird error code. The ATM doesn't tell me how much is too much." So if the ATMs only support a per-transaction limit, setting it to the per-day limit improves the user-experience for most people. Aug 24, 2022 at 20:03
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@JamesTurner any chance it was OnPoint? It was a Capital One debit card but I used an OnPoint ATM iirc.– SomeoneAug 24, 2022 at 21:29
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@GavinS.Yancey That's plausible. This assumes the daily limit error is "weird". NSF errors are pretty clear, but I don't recall what a daily limit error code looks like. Perhaps it varies.– TTTAug 25, 2022 at 15:30
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@GavinS.Yancey My bank uses the latter method. In fact, if I try to withdraw too much at once, it simply says my account doesn't have enough money. Very bad user experience if you're not aware of it! Aug 25, 2022 at 18:01
I think it's to prevent a situation where someone accidentally withdraws thousands of dollars accidentally.
For example, some people may throw a few extra 0s on the end either confused about if they need to include cents, or simply not paying attention.
Obviously it's suboptimal for people to be carrying around thousands of dollars accidentally.
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1I don't know that I've looked at deposit options at gas station ATMs (which I haven't had need to use in years), but every bank-run ATM I've seen in the last 30 years accepts deposits– warrenAug 25, 2022 at 13:53
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1@warren They are(/were?) ATMs for business owners to use at the end of day to drop off cash so they didn't have to keep it at home or on-premises. Aug 25, 2022 at 14:00
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2Bank-branded ATMs in the US and Canada almost always have deposit. In other regions, including Europe and Asia, this is significantly more rare, and even at bank branches, restricted to one or two units. (This difference is why Europeans think checks are obsolete, where in US and Canada we don't understand the hassle) Another thing to note is if you're using an ATM at a different bank than your own, you likely do not have deposit ability. (Credit union networks are the exception) Aug 25, 2022 at 18:43
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2@user71659, no, we think cheques are obsolete because everything you can do with a cheque can be done via online banking, with none of the insecurity, inconvenience (yes, even if you have an ATM where you can deposit them, you still have to physically go to it) and (I assume) much less overhead for the banks Aug 26, 2022 at 7:01
It's common thing in ATMs that are not operated directly by your bank, but by some independent network. That's because your bank has to pay fee to owner of ATM for each transaction. So for the owner it's more profitable to serve more transactions using the same number of bills.
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Don't discard that the OP bank will pass the transaction fees to him...– ÁngelAug 25, 2022 at 22:55
While I like bta's answer best (and I think it's the main reason), here's one more aspect that hasn't been considered: fraud protection.
Suppose you get a large amount of illegal money in your account. Say, a forged check. You know that it will be discovered soon so you want to withdraw it in cash and disappear. Having a limit in place makes sure you can't empty the whole ATM at once. In fact it will be a very slow and tedious process to withdraw large sums of money (tens of thousands). This makes it both impractical and also gives the bank time to react.
While I don't think I'm going to add anything other answers haven’t already covered, I wanted to frame it slightly differently. This is based on speculation as much of the other answers are and I have no experience in the field of ATMs.
ATMs are stocked with a finite amount of cash, and need to be restocked regularly. How much cash they hold is a balance between not having to restock too frequently and not making it too much of a target for criminals.
Restocking requires a secure van and a couple of people driving about so naturally costs money. They don't want someone to empty it in a single transaction so a limit has to be set somewhere but they also need to cover the costs of restocking each time. A transaction fee charged to the bank and value limit allow for predictable minimum revenue between restocks.
