Free ATM Access
Malaysian Banking Associations Announce Free Interbank ATM Withdrawals Starting July 2026
Key Points
Before the change, debit cardholders had to pay the RM1 fee specifically when they withdrew cash from an ATM of a different bank.
The waiver was described as applying not only to ATMs but also to Smart Recycler Machines (SRMs) operated by “licensed banks in Malaysia.”
In their joint statement, the associations quoted that “cash remains an important and essential means of payment for many Malaysians in managing their daily lives,” framing the fee removal as supporting that continued need.
The industry said the removal of the interbank ATM fee means “one less small charge to worry about when withdrawing cash from the nearest available ATM,” highlighting the everyday consumer impact.
Starting July 1, 2026, Malaysians will no longer pay the RM1 fee for withdrawing cash at a different bank's ATM. The Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and Association of Development Finance Institutions of Malaysia (ADFIM) announced the permanent waiver on June 15, carried out together with Bernama payments infrastructure provider PayNet.
The change covers all 14,000-plus ATMs and Smart Recycler Machines (SRMs) run by licensed banks nationwide. Debit cardholders can now make unlimited free withdrawals at any machine, not just their own bank's. The associations said this means "one less small charge to worry about when withdrawing cash from the nearest available ATM."
How the RM1 Fee Came and Went
The RM1 interbank ATM fee — historically called the MEPS fee — was a long-standing charge in Malaysian banking. The government waived it temporarily in April 2020 during the first COVID-19 lockdown, letting people use the nearest ATM without penalty. But by February 1, 2022, banks reinstated it, drawing criticism from consumer groups, according to The Malaysian Insight.
The pressure to scrap the fee kept building. In early 2025, the National Union of Bank Employees (NUBE) launched a petition drive targeting one million signatures to push the Finance Ministry for a permanent ban. NUBE General Secretary J. Solomon argued, "RM1 may not appear big to many, but it adds up to a huge amount over time for the lower-income group," as reported by Sarawak Tribune.
PayNet's RM1.43 Billion Windfall From a Small Fee
The fee was not small in aggregate. According to MalaysiaNow, PayNet — the national payments network that processed these transactions — earned a cumulative RM1.43 billion from the fee since its launch through early 2025. In 2023 alone, PayNet recorded RM544 million in total revenue and RM271 million in net profit.
Critics called this a "monopolistic venture." Economics professor Yeah Kim Leng argued that a private company profiting from essential interbank transactions was hard to justify, as cited by Sarawak Tribune. With nearly 39,000 Malaysian workers retrenched between January and May 2026 due to weak demand and rising costs, the fee waiver is widely seen as relief the government could deliver quickly.
Cash Still Matters, But Banks Push Digital Too
The three banking associations were careful to frame the waiver around financial inclusion, not just cost cutting. Their joint statement said "cash remains an important and essential means of payment for many Malaysians in managing their daily lives." The waiver removes the incentive to hunt for a specific bank's ATM — especially important in rural areas where only one or two machines may be nearby, according to BusinessToday.
At the same time, banks made clear they will "continue to promote secure and convenient cashless payment solutions," per the joint statement reported by The Vibes. The move is a balancing act: keep cash accessible for those who need it, while nudging users toward digital payments over time.
What This Saves You — and What Banks May Do Next
For a consumer who withdraws cash twice a week at a non-home bank, the waiver saves roughly RM104 per year. The change also removes what analysts call a "psychological barrier" — the habit of walking past a convenient ATM to find your own bank's machine. With 14,000-plus ATMs and SRMs now effectively free to use, that friction disappears entirely.
For banks, the revenue loss is real. RAM Ratings noted that Malaysian bank profitability eased in Q1 2026, with credit costs expected to rise to 15 basis points for the full year, according to The Star. Analysts suggest banks may look to offset lost fee income through other service charges or digital transaction fees going forward — meaning consumers should watch for shifts elsewhere in the fee structure.
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