TOKYO -- MUFG Bank and Sumitomo Mitsui Banking will let each other's account holders withdraw cash from their ATMs at no charge on weekdays during the day, starting in the first half of 2019 at the earliest.
The free usage scheme will be initially available at roughly 2,300 ATMs outside bank branches, and may eventually be expanded to all machines.
The two Tokyo-based banks hope the measure will help maintain a competitive level of convenience for customers as they steadily remove ATMs, whose use is declining amid the growth of online banking.
At first, the service will be available at ATMs located at unmanned spots, such as near railway stations and inside commercial facilities. After gauging the impact, the banks may consider making it available at all of their 14,000 ATMs across Japan.
The tie-up is the first of its kind between two of Japan's "megabanks," although Mizuho Bank launched a similar deal in 2013 with smaller player Aeon Bank, which is affiliated with retail giant Aeon.
The deal includes plans for MUFG and Sumitomo Mitsui to close between 500 and 600 ATMs, which they expect will cut costs totaling several billion yen (tens of millions of dollars) annually.
The program will allow account holders to use the selected ATMs at the institution where they do not have an account just as they do with those operated by their own bank.
The banks currently charge non-account holders 108 yen per cash withdrawal from their respective ATMs between 8:45 a.m. and 6 p.m. on weekdays. The fee is raised to 216 yen for a withdrawal at other times.
The two banks are negotiating how to manage fees charged on transactions performed at each other's ATMs.
They are also negotiating plans to jointly develop a limited-function ATM that accepts and dispenses bank notes, but does not have the capability to handle coins or read or print passbooks. Another plan is to operate ATMs jointly.