New Free ATMs Turn Users Into a Captive Audience
| January 23, 2012 |
A company in Brooklyn, N.Y., has developed a new model for ATMs that offers an alternative to highly unpopular ATM fees.
The concept for Free ATMs NYC is that there’s no fee for transactions. But there is a catch — you have to watch a series of ads to complete your transaction. At the end, you get a coupon on your receipt with more advertising. The third-party advertisers are charged a flat monthly fee and are essentially covering what it would have cost you to use the ATM.
The stakes are high in finding an alternative, as Americans spend about $7 billion in ATM fees each year. According to the Bankrate 2011 Checking Survey, the average cost for using an out-of-network ATM is $3.81, which includes charges from your bank and the outside institution.
Townsend plans to place no-fee ATM machines in cafes, supermarkets, hotels, bars and malls and other spots where banks aren’t located. Every no-fee ATM will feature a slideshow of ads on a regular display screen while some will have an additional screen above the ATM for a 24-hour stream of video ads. The ads play while the transaction is being completed, so it won’t increase the time you’re standing in front of the ATM.
So far, Townsend is alone in this kind of venture. Its success will depend on whether customers are willing to make the tradeoff — being spared a fee in exchange for watching more advertising. And there is one problem with price control. The company can’t stop your bank from charging you for using an out-of-network ATM.
But the ATMs can offer assurances to advertisers that their product is being seen. While it’s hard to say who’s really viewing ads on billboards, in newspapers or on coffee sleeves, the Free ATMs NYC model can calculate exactly how many people are exposed to the ads by the number of transactions.
If it does catch on, it could be further bad news for big banks who may be looking to ATM fees to help make up for what they’re losing under financial reform. After big banks withdrew their attempts to charge debit card fees in 2011, they will surely look for other sources of revenue to stem the bleeding.
The concept for Free ATMs NYC is that there’s no fee for transactions. But there is a catch — you have to watch a series of ads to complete your transaction. At the end, you get a coupon on your receipt with more advertising. The third-party advertisers are charged a flat monthly fee and are essentially covering what it would have cost you to use the ATM.
The stakes are high in finding an alternative, as Americans spend about $7 billion in ATM fees each year. According to the Bankrate 2011 Checking Survey, the average cost for using an out-of-network ATM is $3.81, which includes charges from your bank and the outside institution.
Free ATMs NYC was founded by 25-year-old Clinton Townsend. In December, he began testing a no-fee machine at the Brooklyn Knitting Factory, a concert venue and bar, and he told CNNMoney that he hopes to have thousands of them operating throughout the U.S. by the end of 2012.
Townsend plans to place no-fee ATM machines in cafes, supermarkets, hotels, bars and malls and other spots where banks aren’t located. Every no-fee ATM will feature a slideshow of ads on a regular display screen while some will have an additional screen above the ATM for a 24-hour stream of video ads. The ads play while the transaction is being completed, so it won’t increase the time you’re standing in front of the ATM.
So far, Townsend is alone in this kind of venture. Its success will depend on whether customers are willing to make the tradeoff — being spared a fee in exchange for watching more advertising. And there is one problem with price control. The company can’t stop your bank from charging you for using an out-of-network ATM.
But the ATMs can offer assurances to advertisers that their product is being seen. While it’s hard to say who’s really viewing ads on billboards, in newspapers or on coffee sleeves, the Free ATMs NYC model can calculate exactly how many people are exposed to the ads by the number of transactions.
If it does catch on, it could be further bad news for big banks who may be looking to ATM fees to help make up for what they’re losing under financial reform. After big banks withdrew their attempts to charge debit card fees in 2011, they will surely look for other sources of revenue to stem the bleeding.
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