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article imageNew ATM offers users to watch a commercial in lieu of an ATM fee

By Leigh Goessl     Dec 5, 2011 in Business
Brooklyn - Are you among those that feel ATM fees are too high? Are you tired of paying for the convenience of accessing your own money?
If so, you might soon have a choice to watch a commercial, in lieu of paying an extra ATM fee, if one new idea gets the green light and is embraced by proprietors, businesses and consumers.
A 25-year-old entrepreneur named Clinton Townsend thinks the solution to extra ATM fees is found in paid advertising. Townsend is the the CEO of a company called Free ATMs NYC.
ABC's Good Morning America reported on Townsend's idea.
Townsend, who hails from New Jersey, but lives in Brooklyn, N.Y., has developed an ATM machine that uses "targeted advertisements" that in theory would eliminate ATM charges for money withdrawn from machines out of a consumer's network.
With everything commercialized nowadays consumers might groan at the idea of having to watch an ad prior to withdrawing their own money, however Townsend insists his ATM machine won't take any longer than it would without the commercial.
The logic resonates with the idea banks are already advertising on ATMs with their own products and services, so FreeATMs would instead show advertisements for local businesses, with deals for customers through delivery of a coupon with the ATM receipt.
The ad is set to run during the time the withdrawal is processing, and would only be for a few seconds.
For those who do not want to view ads, an ATM surcharge of $3 would apply.
"We don't want customers to feel like hostages," Townsend said.
Customers also are given some other choices, such as donating a portion of their fee to charity. At this time it is not clear whether the user can choose the fee or would have to apply to pre-designated charities.
Currently the ATM is only available in one location, the Knitting Factory, a music venue and bar located in Brooklyn, but Townsend hopes to expand through the New York metropolitan area and beyond someday.
Knitting Factory general manager Bob Reiter said of the ATM, "I've heard nothing but good things from customers," adding, "I've had a lot of people who come in not for the bar or a show but just to use the ATM. It's been good for business."
Reiter said the ad is hardly noticeable and said the screen is not an interruption to customers using the ATM. He also thinks it's a good draw to bring customers in who might stop in his place of business to purchase a drink or see a show.
There is a catch to this, however, as the ATM company cannot remove fees that banks charge for using an out-of-network ATM.
We can't control what your bank does," Townsend said.
The plan is to place the ATMs "very strategically" said Townsend. Adding, "We target a demographic and we place them in safe locations. Not on street corners in high crime neighborhoods, for example," he said. "We don't put our customers in harm's way. Our goal is to make our customers happy."
According to a New York Times article, Townsend hopes to serve smaller areas where big banks are not serving and independents charge $3 per transaction.
“We’re looking to eliminate that,” Townsend said in a phone interview with the NYT.
It is estimated consumers paid a whoppingl $7.1 billion in ATM fees during 2010, and a survey shows most ATM users do not think these fees are fair.
It sounds like a possible benefit is some money is kept local rather than paying ATM fees to some unknown entity. If Townsend's business model for this product succeeds, it could potentially mean lowered ATM fees for consumers, increased customer base for the advertisers placing commercials on the ATM and increased foot traffic for those locations agreeing to host a machine.
How Townsend profits is by charging the businesses, but businesses pay to advertise anyway, so this could be a future potential marketing channel if the idea catches on with advertisers.
A trial run slated to run from January through March may provide more answers on whether or not this idea will catch on. Narragansette Beer is planning to run an ad on the ATM at the Knitting Factory. If this idea is embraced, you might soon see commercials appearing at an ATM near you.
More about atm fees, atm machines, Clinton Townsend, Free ATMs NYC, Commercials
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