New Yorkers can now withdraw cash from ATMs outside their banks without having to pay a fee.
About two dozen FreeATMs have rolled out in coffee shops, delis and bars in Manhattan, Brooklyn and Queens. The processing fees are paid for by advertisements, which play for about 10 seconds while customers wait for the money to be dispensed.
"When customers walk up to a FreeATM, they'll see our ads running on the digital screen that sits on top, as well as on the transaction screen," said co-founder Clinton Townsend.
He and co-founder Eric Fondren said they came up with the idea to set up a free ATM as broke college graduates.
"We hated paying ATM fees," said Townsend.
Consumers seem to like the concept.
"There's one question they ask: 'Free ATM? Where? And why hasn't this happened before, it's such a simple idea,'" said Fondren.
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Student Andres Verreondo was one of the first customers to try out a FreeATM in lower Manhattan.
"When I saw it, I was like 'Finally!'" he said. "This is awesome for me as a student."
While there's no fee at the machine, banks could potentially charge their own fees after the fact. And the big challenge for the startup is that there are only a small number of FreeATMs while traditional ATMs are just about everywhere. Most people don't want to have to go looking when they need cash.
Banker Lawrence Hammond said he'd "most likely" use a FreeATM, but only if it were close and convenient.
The business is hoping to expand quickly, and plan to add another 30 machines by the end of the year.
