ATM Fee, or an Advertisement? You Decide.

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By: Dwayne W. Waite Jr.

Fees at ATMs drive consumers crazy. No one likes paying a fee to get their own money. In the U.S., the bank fee system goes against the free enterprise mindset people have when it comes to the money they earned. As for the banks, those businesses may chalk the fees up to convenience; they have to carry money and maintain the ATMs, so that service it is going to carry a value with it. And, if you use a different bank's ATM, the fee serves as a penalty. Customers have fought back and have won several battles in the ATM-fee war, mostly due to the other channels banks can shift their costs to. Though now with recent legislation about to reduce a stream of revenue banks depend on (the credit surcharge fee), banks are again looking for ways to boost their already ridiculously profitable revenue streams.

Now they are looking at advertising.

The Consumerist reported on a company in NYC called Free ATMs NYC that is looking at making all withdrawals free. The catch is that, during your transaction, an ad appears on the screen, and when you get your receipt it is possible to also take away a coupon from the advertising business.

The Times.com article that first covered the story cited a survey that found that 77% of Americans disagree with ATM fees, and 56% of Americans thought $0 was the right amount for charging ATM fees. Immediately, then, switching to an ad-supported model may seem like a good idea.

It is interesting why this idea hasn't come up before. In cities, people run to ATMs to get cash for the night to cover charges at bars or to avoid using plastic during the night, so showing an ad for a local establishment during the withdrawal process could benefit businesses. If people are taking out money, then the businesses are being exposed to a primed audience. This audience may be even more receptive if they aren't sure what their plan is for that afternoon or evening.

Could this activity be the next Out-of-Home advertising sensation? For those who use mobile banking, how can banks and other financial institutions take advantage of this captive audience?

Then there is the other side of the coin. Banks are not carrying the most stellar reputations these days. How can the businesses who advertise on these ATMs be sure that their images aren't tied to the bank's? Even if these ATMs are made, distributed, and maintained by a third party, consumers are still going to associate the advertisement with their respective bank. If this activity picks up, it will be quite the interesting juggling act.

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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