It used to be enough that banks offered customers a way to get at their money 24 hours a day. Automated teller machines (ATMs) not only let people make withdrawals in the middle of the night, they also let them make deposits and transfer money from one account to another. But for many of the banks and savings-and-loans that bought and installed them, the machines aren't being used enough. So bank customers in some cities are being bombarded with offers, prizes, and games to sign up for ATM cards, or to use their cards more often.
Most of these promotions are not coming from the banks, but from ATM networks. These networks, with names like Cirrus, Plus, NYCE, Yankee 24, Pulse, and MAC, allow customers to use their cards not only at their own bank, but at any other bank in an area network or around the country.
The latest lures from the networks are sweepstakes and random drawings, with prizes ranging from a $5 bill to a luxury vacation. In one of the sweepstakes, bank customers are automatically registered for a drawing each time they use an ATM in the network for some kind of payment transaction (balance inquiries, which can be made at ATMs, don't count). Another network printed special transaction receipts that were good for instant prizes ranging from an appliance to a trip to Europe.
There are about 80,000 ATMs in the United States, says Linda Fenner Zimmer, an independent researcher on ATMs in Marlborough, Conn. Those machines handle about 4.8 billion transactions a year, including 3.6 billion withdrawals, she adds.
But the machines could handle far more business. ``We've doubled our ATM population'' in the last five or six years, Ms. Zimmer says. ``But there was no parallel marketing effort. Without marketing, we just had the same base of customers using a far greater number of machines.''
In the meantime, the banks have looked at other ways to recoup some of their investment in ATMs. When the first ATM cards were handed out, almost all banks charged nothing to use them. The potential savings from having a smaller staff of live tellers was expected to more than offset the cost of the cards and machines.
That worked for a while, but as banking became more competitive, bankers began taking a harder look at the bottom line. At many banks, but not all, that now means ATM fees or, to use the industry's euphemism, ``pricing.'' Thus, what was once a fairly simple task - pick an ATM service that is closest to your home, work, or both - can be a sometimes confusing process of comparing fees.
Some banks charge nothing for using one of their own ATMs or one on a network, while others impose a fee, usually 50 cents to $1, for a transaction at another bank in the network. Other banks charge for all transactions, or only for some services, like a $1 fee for a statement of the last month's ATM activity.
``I think banks are so anxious to try and turn electronic banking around from red ink to black ink that they're charging and doing OK for the short term,'' Zimmer says. ``But they may be killing the goose that laid the golden egg. People may go back to using their checkbooks.''
``I'm of the opinion that pricing ATM use is not the way to go,'' says Catherine Bond, an ATM marketing consultant in Hartford, Conn. ``Slapping a 25- or 50-cent fee on an ATM is like a supermarket charging 50 cents to use a grocery cart.''
In the meantime, the banks and the networks are using sweepstakes to get more out of their machines while keeping the fees. Some networks have reported at least short-term increases in transaction volume, ranging from 15 to 77 percent after starting sweepstakes.
``The sweepstakes are an easy and quick way for the networks to get more people using their ATMs,'' Ms. Bond says. Still, she believes most people will continue to select an ATM for more practical reasons, like convenience and cost. ``Assess your need for the card,'' she says. If your bank is handy and is not part of a widespread regional or national network, but has lower fees than banks that are in networks, you may not need the network.
But if you travel frequently, the ability to get cash at any time in any part of the country will make almost any reasonable fee worthwhile.
Another consideration with any ATM, regardless of fees, is safety. Despite reports of holdups and robberies at these machines, the overall record is good. Out of those 4.8 billion transactions over the last 12 months, there were about 1,200 incidents in which a customer was robbed or attacked, both Zimmer and Bond note. That works out to about 1 attack per 4 million transactions.
But as Zimmer says, ``I don't want any murders, muggings, or robberies. A person's life is a person's life.''
To help prevent trouble, she offers some safety tips:
Don't use an ATM if you notice any suspicious activity or people around the machine. Go back later or find another machine.
Don't count your money or expose it at the ATM or in your parked car. Walk or drive away and count your money later.
If the ATM is near a curb and you drove to it, don't leave your car running while you walk to the machine.
All this may be another reason for picking a particular bank and its ATMs, Zimmer says. ``If I usually use the ATM at night, I would probably know which ATMs fit my criteria for feeing secure.''