New Company Eliminates ATM Fees By Showing Ads

Free ATM's NYC Founder & CEO Clinton Townsend explains


This is a rush transcript from "Your World," December 5, 2011. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF “YOUR WORLD”: All right, paying ATM Fees, sitting through commercials. Now, neither is anyone’s favorite thing to do, but my next guest is banking you might be willing to watch a very quick ad in place of paying that up to $3 ATM charge. It could be more in some places.

Clinton Townsend is the man behind Free ATMs New York. He joins me right now.

Clinton, how does this work? In other words, you can avoid the fee if you watch this little commercial blurb, right?

CLINTON TOWNSEND, FOUNDER AND CEO, FREE ATMS NYC: Yes, absolutely. So, our company is called Free ATMs NYC. The way that we offer our services for free through the public is through third-party advertisers. So as customer walks up to the ATM machine, they’ll see on the screen a slide show of graphics, which would be advertisements on the screen of the ATM machine before they begin their transaction.

And then as they begin their transaction, they’ll normally type in how much money they would like and whether or not they would like a receipt. And then at that point, when the transaction typically says please wait while processing, we have the ability to show an advertisement in the middle of that transaction process right then and there.

So instead of the customer seeing please wait while processing, they are seeing an advertisement for a local business.

CAVUTO: Oh, I thought they had a choice. I just want to get my money. I don’t want to watch an ad.

TOWNSEND: Well, as of right now, the technology that we have are just showing the advertisements. And, mind you, it takes absolutely no longer than it takes for your bank to process the transaction that we show the advertisement. So we don’t hold customers up.

CAVUTO: You’re too young, but I remember when theaters started showing commercials. And I thought my ticket price will go down. No, it just kept going up. I find it annoying.

Go to your typical movie. Let’s say the movie starts at 2:00. It actually starts at 3:00 with all of the commercials and everything. I’m exaggerating here, but to make a point. How do you know that you’ve just unleashed a new commercial opportunity? Hats off to you maybe for that. But it isn’t going to be a choice, and people will be stuck with it?

TOWNSEND: Well, as of right now, we have one option, which is to have the commercial played during the waiting time. As we said, the waiting time takes no longer than it takes to normally process...


CAVUTO: What if you’re in a high crime area?

TOWNSEND: Well, high crime areas, we make sure that we don’t place our machines in high crime areas.

CAVUTO: Or it’s a very quick commercial.

TOWNSEND: One of our commercials -- sorry -- one of our concerns is that we want to make sure that the advertisements are within the transaction processing time, and it takes no more time than that.

CAVUTO: Like 15 seconds or something. Right?

TOWNSEND: Typically, 10 to 15 seconds or less. It all depends on your bank and how long your bank takes to respond our request to approve you transaction.

CAVUTO: But, Clinton, you and I are talking here in Manhattan. And all the ATM machines, for those who are not familiar, there can be lines leading to them. And I’m invariably caught behind the person, who is pressing like this, and usually it’s my wife, it’s taking a while.

And I’m just saying if this person is going to watch a commercial besides, I’m going to strangle them.

TOWNSEND: Well, as I said, as of right now, the commercials take no longer than it takes to process a transaction. And as of right now customers do not have the option in order to avoid the commercial or pay a fee.

CAVUTO: But what have your studies found given the choice, if they could waive the fee or watch a 15- or whatever second commercial?

TOWNSEND: Given what our studies have found, based on just general surveys that we’ve done with people, people would rather watch the commercial and avoid the fee, especially when there’s no additional transaction processing time for those individuals.

CAVUTO: Really?

TOWNSEND: Absolutely.

Now, one thing that we are looking at right now is an option where people can actually pay a fee vs. avoiding the transaction. And a portion of that fee -- we have been reached out to by a number of nonprofit organizations that would like to see whether or not they can have that person donate a portion of their transaction fee...


CAVUTO: Now, it’s getting complicated.

TOWNSEND: It may get a little complicated, but at the end of the day, I think that we’re doing a good service for the community and I think that offering...


CAVUTO: But will you feel guilty when you go by Times Square and Bank of America ATM machines, and there are lines of people just waiting to see a 15-second spot?

TOWNSEND: Well, as I said, our transaction time takes no more time than it takes for the transaction to process. So, at the end of the day, if you’re waiting on-line, it is not because of our advertisements. It’s because of the processing time for that bank.

CAVUTO: But it would be double jeopardy if it turns out it was an ad for CNN. Wouldn’t that be a kick?


TOWNSEND: Well, we make sure that our ads are particularly targeted at the locations....



CAVUTO: All right. Interesting idea. We’ll see what happens. The whole world is going this route, theaters, yes.

TOWNSEND: Yes, absolutely.

And we’ve been approached by a number of different strategic partners that are interested in having this ATMs placed in their locations. We’ve also been approached by a number of different advertisers.

For example, in the location that we have at Brooklyn Knitting Factory, which is our first ATM location, that’s a particular concert hall or venue. So we have actually signed on Narragansett Beer to actually advertise at that particular location.

CAVUTO: So you can drink while you’re on the long line.

TOWNSEND: Well, we hope that you’d watch the advertisement and you will now want to drink a Narragansett Beer after watching the advertisement.

CAVUTO: Well, but by the time you get up to the line, you’re so plowed, you’ve completely lost track...


TOWNSEND: Well, as I said, our transaction time takes no longer than a regular transaction. And that’s one of the main points that we want to get across.


CAVUTO: Clinton, you are good.

TOWNSEND: Absolutely.

CAVUTO: You swatted away all these criticisms.

TOWNSEND: Clinton Townsend, we shall see, coming to an ATM near you, maybe sooner than you think.

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