Commonwealth Bank Scraps Controversial $3 Fee After Backlash- Customers Call It ‘Really Unfair’

In December 2024, the Commonwealth Bank of Australia (CBA), the nation’s largest financial institution, faced significant backlash over its plan to implement a $3 fee for in-person cash withdrawals.

The proposed fee was intended for customers transitioning from the “Complete Access” account to the “Smart Access” account.

Following widespread criticism from customers, government officials, and advocacy groups, CBA announced a pause on the fee’s implementation to reassess its approach.

Initial Announcement and Backlash

On December 3, 2024, CBA revealed plans to migrate customers from the legacy “Complete Access” account to the “Smart Access” account, effective January 6, 2025.

This transition would have introduced a $3 fee for each assisted cash withdrawal conducted at branches, post offices, or via phone. The move was part of CBA’s strategy to streamline its account offerings and encourage digital banking.

The announcement was met with immediate and intense criticism. Customers expressed their dissatisfaction, labeling the fee as a “cash grab” and “highway robbery.” Many threatened to close their accounts in protest. Government officials also condemned the decision.

Assistant Treasurer Stephen Jones described it as “the worst Christmas present imaginable,” emphasizing that it unfairly targeted those who prefer or rely on cash transactions.

Housing and Homelessness Minister Clare O’Neil echoed these sentiments, calling the fee “really unfair” and ill-timed given the cost-of-living pressures faced by many Australians.

CBA’s Response and Policy Reversal

In response to the widespread backlash, CBA’s Group Executive of Retail Banking Services, Angus Sullivan, announced on December 4, 2024, that the bank would pause the planned changes. He acknowledged the bank’s failure in effectively communicating the transition and the associated fees.

Sullivan stated that over the next six months, CBA would engage individually with affected customers to develop tailored solutions, rather than proceeding with a blanket migration to the “Smart Access” account.

Sullivan admitted, “Clearly, we’ve done a poor job of communicating aspects of this change for our customers.” He emphasized the bank’s awareness of the challenges customers face, especially during the holiday season and amid rising living costs.

The $3 fee would remain in place for existing “Smart Access” account holders, but the migration of “Complete Access” customers was halted to allow for personalized consultations.

Government and Public Reaction

The government’s reaction played a crucial role in CBA’s decision to pause the fee implementation. Assistant Treasurer Stephen Jones had urged the bank to reconsider, stating, “This seems to me to be a tax on Australians who demand the right to use their cash, and the government won’t stand for it.”

The public’s response was equally vehement, with many customers voicing their intent to switch banks if the fee were imposed.

The controversy highlighted the ongoing debate over the accessibility of cash services and the responsibilities of major financial institutions to their customers.

Comparative Analysis with Other Banks

The issue of fees for in-person transactions is not unique to CBA. Other Australian banks have implemented similar charges:

Bank	Fee Description	Amount
ANZ Bank	Fee for certain over-the-counter transactions	$2.50
Westpac Bank	Fee for specific banking transactions; over-the-counter transaction fee	$5.00; $2.50
Bendigo and Adelaide Bank	Fee for ATM transactions	$2.50
Macquarie Bank	Fee for overseas ATM transactions	$5.00

These fees reflect a broader industry trend towards digital banking and a reduction in cash handling services. However, CBA’s proposed fee was particularly contentious due to its timing and the perception that it disproportionately affected vulnerable customers.

Implications and Future Outlook

CBA’s decision to pause the $3 withdrawal fee underscores the importance of clear communication and customer engagement, especially when implementing changes that directly impact customers’ access to their funds.

The incident serves as a reminder for financial institutions to consider the broader social and economic contexts in which they operate.

As digital banking becomes more prevalent, banks must balance operational efficiencies with the need to provide accessible services for all customers, including those who rely on traditional banking methods.

What was the proposed $3 fee by Commonwealth Bank?

The fee was intended to charge customers $3 for each assisted cash withdrawal conducted at branches, post offices, or via phone, as part of a transition from the “Complete Access” account to the “Smart Access” account.

Why did Commonwealth Bank decide to pause the implementation of the fee?

The bank faced significant backlash from customers and government officials, prompting a reassessment of the fee’s impact and a commitment to engage individually with affected customers.

Are other Australian banks charging similar fees for in-person transactions?

Yes, banks like ANZ, Westpac, and Bendigo and Adelaide Bank have implemented fees for certain over-the-counter transactions, ranging from $2.50 to $5.00.