Australians are spending more than $750 million a year on ATM fees despite attempts by the Reserve Bank to reform the system, a new survey claims.

The report from the Australia Institute reveals that while the overwhelming majority of people think banks charging a $2 ATM fee to non-customers is unfair, a quarter of those surveyed had paid the fee in the past week.

The report found young people bear the brunt of the fees, with almost half of those aged between 18 and 24 having paid a fee in the week prior to being surveyed.

The institute's deputy director, Josh Fear, says despite the Reserve Bank's reforms - which were designed to lower the cost of ATM withdrawals and promote competition - the $2 fee has become a benchmark.

"While the use of third-party ATMs has fallen by 18 per cent, saving consumers around $120 million, this has been brought about by consumers changing their behaviour, not through competition forcing the price of such transactions down," he said.

"But there is only so much consumers can do to avoid these fees.

"If someone checks their balance before withdrawing cash, they can be charged a double-whammy fee of $4."

Mr Fear says people are being penalised for staying informed about their financial situation and this discourages good financial behaviour.

"Competition has failed to bring down the cost of ATM fees and this doesn't look like changing in the near future," he said.

But he says there are options available for policy-makers who want to give consumers a better deal.

"Requiring ATM owners to display the cost of transactions prominently on the outside of their machines, abolishing fees for balance enquiries," are just some of the solutions, Mr Fear said.

Australian Bankers Association chief executive Steven Munchenberg says the $750 million a year only works out to be about 70 cents per person per week.

"Most people are using their own banks, more people are taking cash out for example when they do their weekly shopping at the supermarket," he said.

"Banks are charging people for a service. The people using the service are not the bank's customers ... where you are buying a service from another bank, then that is what you are paying for."

The Australia Institute says it only costs banks 70 cents for an ATM transaction, while it can cost consumers up to $4.

But Mr Munchenberg argues the cost is used to fund more ATMs.

"The reforms are in fact working because the banks are providing more ATMs, more ATMs for free," he said.

"What the obvious consequence of not being able to fully recover the cost of an ATM network is that those ATMs will be the ones that the banks will decide not to operate."

The institute's research was based on an online survey of 1,294 Australians in November last year.