Consumer Payment Card News

ATM Backlash

A new study released this morning shows 78% of ATM consumers actively avoid ATMs with fees. The Opinion Research Corporation study also revealed that 67% of ATM customers say ATM fees discourage them from considering the fee-charging bank for other products and services. Of consumers using ATMs outside their own bank’s branch system and incurring surcharges, 47% say it “makes them mad” while 38% say it “bothers them somewhat”. Other ORC findings 57% have used an ATM at a non-bank location, 48% have used ATMs at the branch of another bank and 44% have used their ATM cards for retail purchases.

Commercial banks that charge fees for ATM usage are angering consumers, according to a study by Opinion Research Corporation International.

Nearly four out of five bank ATM customers (78 percent) are “actively” avoiding using machines that charge a transaction fee. What’s more, more than two thirds (67 percent) of these ATM customers say that the fees discourage them from considering the fee-charging bank for other products and services.

“ATM fees are a complete turn-off for many, many consumers,” says Jeffrey T. Resnick, executive vice president of the global market research and marketing services company. “Bank customers tell us they appreciate the widespread availability of ATMs, but are very upset about being charged for accessing their ‘own money.’ In this environment, banks with fees are missing out on countless opportunities to establish and strengthen customer relationships.”

Cost of Convenience

Nearly nine out of every ten banking customers who have used their ATM card during the past six months (87 percent) have used one of their own bank’s machines, according to the ORC International study. In addition, 57 percent have used an ATM card at a machine in a non-bank location such as an airport or shopping mall, 48 percent at a branch of another bank, and 44 percent at a merchant that accepted at ATM card for payment.

To a great degree, reports the ORC International study, transaction fees are incurred when customers use ATMs outside their own bank’s branch system. Only 12 percent of those using an ATM card at their own bank’s ATM report paying a fee, while virtually all users (91 percent) of an ATM at branches other than their own bank’s report paying a transaction fee. Two in ten report paying more than $1.50 for a transaction. And among those who have paid fees, nearly half (47 percent) say the transaction charge “makes them mad” and another four in ten (38 percent) say it “bothers them somewhat.”

Market Opportunity for Banks

Commercial bankers argue that providing ATM access to non-customers is costly and they need to charge a transaction fee to cover expenses. “In our view,” says ORC International’s Resnick, “commercial banks should reconsider that approach. The value of the missed marketing opportunities to build strong client relationships may be grater than the revenue lost by eliminating the charges. Banks that institute a no-fee or, if necessary, a nominal-fee strategy can attain a distinct competitive advantage.”

The study was conducted by Opinion Research Corporation International among a nationally representative sample of 1,000 adults, and has a margin of error of +/- three percent.

Opinion Research Corporation International, founded in 1938, is a global market research and teleservices company, with offices in the United States, Europe, Asia and Latin America.

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