Magazine article American Banker

Bank Pays Customers to Use Others' ATMs

Magazine article American Banker

Bank Pays Customers to Use Others' ATMs

Article excerpt

One community bank in Missouri is engaging in an interesting turnabout: paying its customers to use other banks' automated teller machines.

To compete more effectively with larger banks in the same market, $185 million-asset Citizens National Bank decided last year to allow its customers to use - at no charge - any of the 1,287 ATMs in the greater St. Louis area, or any of the 109,000 ATMs affiliated with the regional BankMate or international Cirrus networks.

And for the first six weeks of 1995, the bank is promoting this strategy with an added twist: New customers who open accounts with Citizens can get $1 back each month for three months if they decide to use a foreign ATM to conduct transactions.

We've made a long-term commitment to this nonfee strategy," said David W. Bentele, president of the Maplewood, Mo.-based bank. "We see our ATM card as a differentiating factor, since everyone else charges for foreign transactions."

Giving up the interchange fees is not an issue, said Mr. Bentele.

"We can pay for this program for less than the cost of one ATM," he said. "The program gives us a competitive advantage over the big banks because they have already invested in all that brick and mortar and are less likely to give up the fee income."

"I applaud the bank's imagination," said community bank consultant M. Arthur Gillis, president of Computer Based Solutions Inc., New Orleans.

"One of the biggest things that turns customers off is when they think they're being forced to pay to give a bank their business," continued Mr. …

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