Almost half of bank customers in the US would consider paying a fee of $0.25 to $0.75 for each transaction, as opposed to a traditional flat-monthly fee, according to a report by consultancy Deloitte.
In total, 48% of those surveyed said they preferred this approach, more than twice as many as the second-placed option of a fixed monthly fee set between $15 to $30.
Respondents to the report said this choice reflected their preferences for total transparency in account and service pricing.
The survey found that many customers would switch banks if fees were increased on existing services.
Almost one in four customers surveyed (22%) said that a $5 fee increase would definitely cause them to switch banks and another 36% said that such a rise would probably cause them to do the same.
Jim Eckenrode, the executive director of the Deloitte Centre for Financial Services, said retail banks’ free checking model has been "withering away" since 2009 and margins were continuing to be eroded.
He added: "The basic economics of retail banking are under substantial pressure, given reduced non-interest income from traditional sources like debit interchange and overdraft fees.
"The question now becomes how banks move away from the free model, which a number of other industries have struggled with and often to the detriment of customer relationships."
The survey was unveiled as part of a report titled Retail Bank Pricing: Resetting Customer Expectations, which examined consumer attitudes towards potential price changes.
Other findings of the survey include:
– While nearly two-thirds of the respondents (65%) believed that all banks are only looking out for their own benefit, most consumers (74%) were satisfied with their primary bank;
– 40% of respondents expressed interest in a digital banking plan that would offer reduced fees while providing a limited level of in-person services, suggesting a significant appetite for primarily electronic account services;
– There were also some notable differences across age groups. High balance requirements were relatively more popular among older respondents, and a discount for favourable social media activity was the most popular option among the youngest respondents, and
– More than one-third of consumers surveyed had no estimate of the cost that banks incur to service their accounts, with 87% thinking it costs $10 or less per month. The industry average is estimated at double this amount, between $250 and $300 a year.
Brian Johnston, a principal and the banking and securities leader for Deloitte Consulting, as well as a co-author of the survey, said banks should account for differences in perceptions and price sensitivity among their customer base by rethinking their approach to customer segmentation.
He added: "Organisations that invest the time and resources to understand how their customers feel about the bank, as well as their willingness to pay for services, can achieve their desired results as they make adjustments to their pricing methods."
Eckenrode said communication and transparency would be important for banks.
He added: "The aim should be to build loyalty and satisfaction through better-tailored, high-quality services and offerings, the combination of which can help to drive customers’ willingness to pay for products and services.
"After these steps, banks will likely receive ‘permission’ from their customers to make significant changes to their pricing policy."