Good news for New Yorkers who've been going out of their way to avoid independent ATMs because of the fees.
Starting this week, FreeATM will roll out 25 surcharge-free ATMS across New York City—from Wall Street to Woodside, Queens. It plans to more than double that number by year's end.
The catch? In exchange for saving $1 to $3 per transaction at independent ATMs, you'll have to sit through a 10-second video ad while you wait for your cash. The Brooklyn-based start-up figures that's a small concession to make in exchange for the convenience of getting money surcharge-free at a neighborhood ATM. "Customers don't want to pay ATM Fees, no matter how rich or poor they are," Clinton Townsend, the company's co-founder and CEO told CNBC.
The company already has plans to expand to other cities like Boston and Washington D.C., once it reaches 250 ATMs in New York. If that expansion is successful, FreeATM could end up rolling out the ad-based ATMs nationwide.
The ATM ads will vary depending on geographic location, venue type, time of day, and assumptions about your socioeconomic status. Townsend said the company uses a proprietary formula to target ads based on the average immediate spending power of a consumer.
Ads will also play in between customer transactions, changing every 15 to 30 seconds when no one is using the machine. Townsend projects the idle time will account for as much as 50 to 90 percent of revenue, depending on how high the foot traffic is around it. Most of the ATMs are inside coffee shops, pizza places, and delis, which see them as a draw for customers.
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