25-year-old Clinton Townsend founded Free ATMs NYC and began testing a fee-free ATM in Brooklyn, New York last month. Townsend plans to launch several thousand advertiser funded ATMs throughout the country by the end of this year. Experts in the industry believe that if this small company is successful; the idea could spiral onto a much larger scale and potentially change the entire way in which ATMs operate.
Currently Free ATMs NYC has already acquired two advertisers. Townsend reports that, the company is currently in talks with some advertising firms and several national companies. The idea behind the advertisers and the commercials is that these companies would essentially cover the fees that the banks charge customers. This in turn would save consumers a lot of money. This year alone Americans have spend about $4 billon on fees charged at non- bank ATMs, paying an average of $2.10 for each transaction.
A few months ago we had an article about how to save money on ATM fees. This article discussed the charges you receive when you use an ATM that is not the ATM of your bank. There is a fee from the non- bank, as well as a fee from your bank. The Free ATMs NYC will only be able to cover the fee from the non-bank, the out of network fee. The fee from your bank from the transaction will still be charged to you. These bank fees average anywhere from $1.20 to $3.00 per transaction.
Townsend plan is to put the ATMs in cafes, hotels, grocery stores, malls and bars. He wants to put ATMs in places where banks are not conveniently located nearby. Up to six companies can advertise on each ATM machine at any given time. The ads will appear before, during and after each transaction you perform on the machine. Additionally, some of the ATMs he plans to launch during the next year, will have an additional video screen above the ATM which will play a 24 hour video stream of advertisements. Each ATM will constantly feature a slide show of advertisements on the regular display screen. During your transaction, a 15 to 20 second slideshow of ads will show up on the display screen. Townsend claims that these ads will not increase the time it takes to complete a transaction. After your transaction is complete, a coupon is printed on your receipt.
The ATMs that are to launch in 2012, will also allow customers the option to skip the ad and pay the usual fees associated with using a non-bank ATM. The first ATM of this kind is currently being tested at the Knitting Factory, which is a concert venue and bar in Brooklyn, New York. Townsend is collecting data on the number of transactions that have been made using the ATM. He plans to release the findings closer to the launch in order to give advertisers a more accurate ideal of potential reach and usage.
Townsend believes that advertising companies will want to use the ATM as a medium for their advertisements. He states that you can advertise on billboards, phone booths, cup holders, whatever you want, but you cannot track how many people have actually seen that ad. With his service, he will be able to say that this exact amount of people has actually seen the advertisements, because they are shown during every transaction. Townsend business plan includes charging advertisers a flat monthly fee to place their ads on the ATMs. Currently, he has not reveals how much the company’s advertising rates will be. However, he says hat the rates his company will charge will be comparable to other forms of local advertising, such as newspapers.
Consulting firm, TowerGroup believes that if Free ATMs NYC launch is successful this winter, other companies will follow suit. Currently most of the stand alone ATMs that you can find in grocery and convenient stores are owned by independent sales organizations and these machines make up about one half of the ATMs in the country, with the other half being bank affiliated ATMs. These independent sales organizations could profit from a more consumer friendly ATM model. If Free ATMs NYC proves to advertisers that there is money you be made, then it is likely that consumers will see a change in the independent sales organizations ATMs.
Recently, a trend and a push for consumers to switch from bigger banks to smaller banks or credit unions has been developing. Some consumers would like to leave their bigger bank, but are worried about lack of ATMs and the fees they would incur by using non- bank ATMs. If these ATMs catch on, then consumers would be free to make the switch from big banks to small banks or credit unions without fear of the cost of ATM fees. Also, if the ATMs become a popular way to operate, big banks may lose some of the extra business they currently receive from non-customers using their ATMs.
So far, I believe that this new plan for ATM fees sounds like a good one. Although, I typically try to avoid ATM fees all together using the tips we presented a few months bank, sometimes using a non- bank ATM is unavoidable. If these ATMs catch on, we as consumers would pay lower fees for these transactions. Anything that saves us all money as consumers, sounds like a wonderful idea to me.
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