"Oh wait, that's not my bank's ATM. I don't want to be charged a $4 fee. Oh well, I'll get you next time." ATM's are not a good solution. I don't want to pay $24 to give someone $20 because of ATM fees. Or wait in a long line (assuming you are at a busy location/area) to get the money.
Or - here's this "checkbook" thing I have sitting in my bag, I'll write you a $20 check, and you open up your banking app and deposit it immediately, and keep the paper check just for a receipt.
People walk around with checks? I cringe on the rare occasions I have to write one to the local water utility (they refuse to provide any recurring payment solution - I suspect because low margins, and they like the late payment fees).
It depends on a lot of things. Some banks charge to withdraw from other banks' accounts. Some banks join "networks" and don't charge for others in the same network. Some ATMs are set up inside stores, and they charge money that goes to the store instead of a bank.
I hear it's pretty common in the US. I guess it has to do with the question who operates the ATM. In Germany it exists too if you use an ATM from a bank that's not partnering with your bank (which is ~50% of all ATMs and straightforward to figure out).
