Friday, October 12, 2007
Higher ATM fees to gain customers?
Bankrate.com's Managing Editor Ellen Cannon blogs about credit and debit cards, prepaid cards, gift cards, credit scores -- anything related to the plastic in your wallet.
Bringing people into the bank may be the real story behind Bank of America's new $3 surcharge, said James Van Dyke, president of Javelin Strategy & Research, a financial consulting firm in Pleasanton, Calif. The firm's research has shown ATM access is one of the top three criteria when choosing a new bank, and rates and fees rank as the most important reason among almost two-thirds of consumers.
So although Bank of America's fee hike rankled non-customers and even sparked online calls to boycott Bank of America's ATMs, the move could also persuade customers of banks with fewer ATMs to switch just to avoid fees.
"The consumer is going to say, 'Why don't I just switch to BofA?' " Van Dyke said. "This is a powerhouse move that only a powerhouse can pull off."