What drives consumers to seek out in-store ATMs?

It’s well known that American consumers feel strongly about avoiding ATM fees. But how far will they go to keep from having to pay them?

This matters to financial institutions (FIs) and fintechs because they know addressing their customers’ and prospects’ most important pain points can help them attract and retain customers.

It matters to retailers because they can count on an in-store ATM to help them increase foot traffic and make incremental sales. While most retailers believe this to be true, how can it be evaluated and quantified as a business decision?

With this question in mind, NCR Atleos commissioned research at convenience store ATMs in six US states to learn more about consumer behavior and compelling motivators around retail ATM use.

In 2024, the market research firm Creative Consumer Research (CCR) was hired to conduct a consumer intercept study through 412 one-on-one interviews. The interview questions were designed to explore the impact of the ATM on consumer traffic and purchase behaviors in general along with the effect of surcharge-free ATM access on foot traffic and purchase intent. Here’s what was learned.

Survey results show significant increases in store traffic

The survey showed that many factors varied by market—for example, in El Paso, 65% of consumers surveyed said they visited the store primarily to use the ATM and 29% said they came both to use the ATM and to shop, but in Phoenix 45% said they visited primarily to use the ATM and 50% said both to use it and to shop. However, some key trends played out across all six states. For example, of the consumers surveyed:

• 28% said they visited the store specifically to use the ATM.
• 88% of those said they knew the ATM was in the store.
• 55% of those said they made a purchase while there.
• $68 per transaction was the average withdrawal amount.
• 38% said they use the ATM at least once per week.
• 57% said they drove 5 miles or less to the store where they used the ATM.
  
• 35% said they would shop less frequently at the store if the ATM was removed.
  

“Free to use” and “secure/safe to use” were the most important factors cited for selecting the ATM they used.

• 28% said they visited a store specifically to use the ATM.
  
• 55% of those said they made a purchase while there.
  

In another 2024 study (conducted in other stores in four states), respondents said they came to the in-store ATM because it was convenient. A combined total of 53% said they chose it because they knew they wouldn’t be charged a fee for a cash withdrawal (40% because they used a network ATM and 13% because they used a bank-branded ATM).

53% of in-store ATM users said they chose that ATM because they knew they wouldn’t be charged a fee for a cash withdrawal.

Clearly, American consumers strongly prefer fee-free ATMs. They will go out of their way to use ATMs that offer surcharge-free withdrawals and deposits, which often means using ATMs placed in retail stores by independent ATM networks such as the Allpoint Network..

So which customers have to pay fees and which don’t?

Of course, it costs money to operate an ATM: hardware costs, real estate costs, maintenance costs and in some cases network costs. It makes sense that FIs and other network operators would pass these costs along to ATM users, and in some countries, they tend to do so.

But because they know how fee-averse American consumers are, many US FIs and fintechs join ATM networks and cover these costs for their customers. They also offer online and mobile tools to help their customers locate surcharge-free ATMs, which, if part of an ATM network, are required to display fee information and network affiliations so consumers know what to expect.

This means that one person may be able to withdraw cash without a fee at an in-store ATM because their FI absorbs the costs of it—either because the ATM is branded with that FI’s logo or because the FI is in that ATM’s network. The next person who uses that same ATM may be charged a surcharge if neither of those conditions apply. While most people will try to find an ATM where they won’t be charged, many will simply go to the nearest ATM when they don’t whether it means pay a fee.

What to consider if you’re thinking about joining an ATM network

There are various options for retailers interested in partnering to place a networked ATM in store. Signing up to “host” a network ATM or a specific financial institution’s branded ATM in your retail store is easy, and there isn’t a cost to do so. The hardware, software and maintenance are typically covered through the network, the location will be included in the network’s online and mobile mapping systems, making your store a beacon to consumers looking for a quick, convenient place to withdraw cash. And it’s surcharge-free if their financial institution is a member of the network.

Another option is to partially subsidize withdrawal fees for out-of-network customers, expanding your potential surcharge-free-ATM-seeking prospect base.

The power of strategic partnership

In conclusion, an in-store ATM can help you build traffic in today’s highly competitive retail market. Managing a complex web of factors like competitive pricing, promotions, loyalty programs, paid and earned media, and technology will always be essential, strategic partnerships such as ATM placement offer no- or low-cost solutions for expanding your customer base.