Objetive:

The regulation established by Banco de Mexico (2010) on commissions for transactions at ATM’S is analyzed.

Methodology:

By using agent based modeling and NetLogo software, the ATM market in Mexico is modeled. Three versions of the model are analyzed in which cardholders are allowed to decide based on different behavioral rules: irrational decision rule, decision rule under probabilities and rational decision rule.

Limitations:

The results of the agent based modeling depends on the conditions initially established, so the model is calibrated for the Mexican context with statistics reported by the Banco de México y the Comisión Nacional Bancaria y de Valores.

Originality:

Due to the lack of evidence in the literature, the research contributes by presenting the effects of ATM regulation from a theoretical perspective by using the agent based computational approach.

Results:

Results show that, regardless of the decision rule, large bank customers will benefit from the regulation.

Conclusions:

The implementation of the reverse interchange fee should be extensively analyzed given it has direct effects on prices, bank’s profits and consumer surplus.

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