Why ATM Fees Aren’t considered Ribis

Hi, when I withdraw money from the ATM machine, I have to pay a 17-shekel fee. So if I withdraw 100 shekels, I end up paying 117 shekels. Isn't that considered ribis and should be prohibited?

Thank you for your question.

The answer:

There is no issue with regard to the prohibition of Ribis.

The answer explained:

Even though it would seem like ribis, since you are receiving less than what you paid to them, nevertheless it is not considered ribis. And this is an opportunity to explain why it is not ribis, and to clarify when some payments are considered ribis and when they are not.

Here are three points explained by Hagaon Harav Fried shlit”a on this matter:

#1 – It's not a payment made from the borrower to the lender

Since we do not consider the owner of the ATM as lending you money, but rather they are lending the bank the money, and the bank lends the money to the person who is withdrawing — therefore, the person who is withdrawing the money is really borrowing from the bank (and if he has credit in his account, then it’s the other way around — it’s as if the bank borrowed money from him). The person who withdraws is paying the fees to the owner of the ATM machine, and so there is no problem with that, since the prohibition of ribis applies specifically between the lender and borrower, not to a third party.

This halacha is found in Maseches Bava Metzia:

תלמוד בבלי מסכת בבא מציעא פרק ה - איזהו נשך [המתחיל בדף ס עמוד ב]
 אמר רבא: שרי ליה לאיניש למימר ליה לחבריה: הילך ארבעה זוזי ואוזפיה לפלניא זוזי, לא אסרה תורה אלא רבית הבאה מלוה למלוה. ואמר רבא: שרי ליה לאיניש למימר ליה לחבריה: שקיל לך ארבעה זוזי ואמור ליה לפלוני לאוזפן זוזי. מאי טעמא - שכר אמירה קא שקיל. כי הא דאבא מר בריה דרב פפא הוה שקיל אוגנא דקירא מקיראי, ואמר ליה לאבוה: אוזפינהו זוזי. אמרו ליה רבנן לרב פפא: אכיל בריה דמר רביתא! - אמר להו: כל כי האי רביתא ניכול, לא אסרה תורה אלא רבית הבאה מלוה למלוה. הכא שכר אמירה קא שקיל, ושרי.

Tractate Bava Metzia (Chapter 5, page 60b):
 Rava said: It is permitted for a person to say to his friend, “Take four zuz and lend money to so-and-so.” The Torah only prohibited interest (ribis) that comes directly from borrower to lender.

And Rava further said: It is permitted for a person to say to his friend, “Take four zuz and tell so-and-so to lend money.” What is the reason? He is receiving payment for speaking (i.e., for delivering the message).

Like with Abba the son of Rav Papa, who would take a jug of dates from the date merchants, and he said to his father, “Lend them money.”
 The Sages said to Rav Papa: “Your son is consuming interest!”
 He said to them: “This kind of interest is permitted. The Torah only prohibited interest that comes directly from lender to borrower. Here, he is being paid for his speech, and that is allowed.”

So we see that ribis only applies when the money is being paid directly from the borrower to the lender.

(Although with regard to the fees one pays to the bank — like for specific services or for being in overdraft — then there would not be a prohibition, because the bank has a heter iska. However, the heter iska is only valid if the money is intended for business use. If it is not intended for that purpose, then it is not simple that one can rely on the heter iska.)

#2 – It’s fees being charged for the service

The fees one pays when withdrawing money are for the service that was provided, and not a payment for waiting to repay the money, since the bank charges your account straight away — so there was no actual loan taking place.

As it is written in the Gemara Bava Metzia:

תלמוד בבלי מסכת בבא מציעא פרק ה - איזהו נשך [המתחיל בדף ס עמוד ב]
 אמר רב נחמן, כללא דרביתא: כל אגר נטר ליה - אסור.

Rav Nachman said: Here is the general rule regarding interest:
 Any payment given in exchange for waiting (i.e., for delaying repayment) — is forbidden.

#3 – Being charged a fixed price

Since the fee being charged is a fixed price, this proves that the charge is being paid for expenses or service, and not for lending you money. (This applies even in a case where a loan did occur — for example, if your account wasn’t charged immediately.)
 Because the way interest is normally charged is as a percentage, not as a fixed fee — and that makes all the difference.

Wishing you much success.

Bava Metzia Page 60

Azamroh Lishmech issue # 287