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Watch ads to avoid ATM fees?

By Claes Bell, CFA · Bankrate.com
Wednesday, November 30, 2011
Posted: 5 pm ET

For those that hate ATM fees, it's been a tough couple of decades. Since we started our annual Checking Study in the fall of 1998, the percentage of ATMs charging a fee rose from 68.4 percent to 98.7 percent. During that time, the average ATM fee has risen from 89 cents to $2.40.

But a New-York based startup may have come up with a way to give Americans the convenient cash they want without the ATM fees they loath: accepting eyeballs in lieu of dollars.

Free ATMs NYC has plans to begin operating the type of free-standing ATMs you often see in convenience stores and in restaurants, but with a twist. Instead of charging a fee, the ATM will play a video ad on its screen while it dispenses patrons' cash.

From Ann Carrns at The New York Times Bucks blog:

While you wait for your cash to be dispensed, a 15-inch screen on the machine plays an advertisement. Then, when you get your receipt, it will have a coupon for a discount, perhaps at a restaurant nearby.

Mr. Townsend said he wanted to install the machines in areas of New York City that the big banks were not serving and where independently operated ATMs charge as much as $3 per transaction. "We’re looking to eliminate that," he said in a phone interview.

The idea of using ATMs as talking billboards isn't new. But banks generally have used them to advertise their own products and services. Also, those ATMs aren't free if you don't have an account at that bank. "Our ATMs are free to everyone," Mr. Townsend said.

While Free ATMs NYC only has one machine installed right now, the model shows promise for disrupting the current ATM marketplace, where big banks use their extensive networks of ATMs to siphon $3 fees from cash-seeking consumers.

There's a caveat, though. Your bank will probably still charge you for using an out-of-network ATM.

I'm also a little skeptical advertising alone will bring in enough revenue to cover the cost of operating the machines and make the company -- and the concept -- spread beyond New York. But I do think the terminals will be wildly popular if they do catch on. A few seconds of ad-watching seems like small price to pay for free access to your cash these days.

What do you think? Would you watch an ad to avoid an ATM fee?

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5 Comments
Krzysztof
December 21, 2011 at 3:05 pm

I live in PA and there's a convenience store chain that has partnered with PNC to offer fee free ATMs, after I have selected what I want dispensed, it shows me an ad for a product in the store, the last time I believe it was a pack of gum of some sort, and on the receipt was a coupon for 30cents off that pack of gum, it's a genius win/win idea for all involved. Google runs off this model of ad paid products and they seem to offer the best products because someone else is picking up the tab.

Ray
December 01, 2011 at 11:22 am

If I did not already have a complex system in place to avoid ATM fees, yes, I would use them to avoid a fee on occaision as long as I were not afraid of being held up while watching an annoying ad.

Cole
December 01, 2011 at 10:10 am

We pay as much (or more) for a small bottle of soda as a 2-liter bottle because it is more convenient. That's what an ATM fee is- a convenience fee. A fee that can be circumvented with a very small amount of planning. That beign said, if there is some other way to pay for that convenience, I'm all for it. However, this concept of "pay for everything with advertising dollars" is precarious. What happens when companies cut back on their advertising budgets?

Wolverine
December 01, 2011 at 8:44 am

That's exactly what I need, to be standing in front of a shady ATM for an extra 30 seconds because McDonalds wants to advertise their latest grease fest on the screen.

LadyV
November 30, 2011 at 7:36 pm

Yes I would watch the ad to avoid the fee. It could be informative and yet save me money.