Saying it wants to reward rather than punish use of automated teller machines, Keycorp has introduced a checking account that pays customers when they make deposits electronically.
The KeyMoney Access account pays 25 cents per deposit - up to $1 per month - when customers use Keycorp-owned ATMs. The idea, company officials said, is to wean customers from traditional tellers.
Customers who open the electronic account are charged $1.50 when they make a deposit with a human teller.
Transactions at a non-Keycorp ATM cost 50 cents to $1.50, depending on who owns the machine. Customers get unlimited, free use of Keycorp's automated phone system.
The new account has been rolled out only in Ohio, Indiana, and Michigan, but the bank has plans to expand the program to the 10 other states where it operates in March 1996.
While other banks are trying to limit all teller transactions, Keycorp is only targeting deposits. All other teller transactions remain free under the KeyMoney Access account rules.
They differ from those on certain accounts at First Chicago NBD Corp. that charge $3 for teller transactions that otherwise could be completed at an ATM, and a $5 fee imposed by Wells Fargo & Co.
Keycorp officials, citing national statistics showing that deposits account for 60% of branch transactions but only 15% of ATM transactions, said they can offer a low-priced checking account while teaching customers to bank away from branches.
"You virtually have a free account if you use our machines," said Larry Peterson, a Keycorp senior vice president in market segment management.
Keycorp is the first major banking company to actually pay customers to use ATMs. For three months early this year, $185 million-asset Citizens National Bank in Maplewood, Mo., paid customers $1 a month to use other banks' ATMs - it didn't have enough of its own machines to put an exclusive program in place.
First Chicago put up with a lot of negative publicity earlier this year when it announced the $3 teller fee.
"When First Chicago announced its product, 90% of bankers in this country stood up and applauded - until they saw the first press comment and realized First Chicago was going to get slayed," said William McGinnis, an analyst with Robert W. Baird & Co., Milwaukee.
Keycorp officials said they want their incentive to send a positive message. "The whole idea here is not to beat people up," said Mr. Peterson. "The idea is to get people to utilize the machines."
The Cleveland-based company is essentially offering a no-frills account. No interest, no return of canceled checks, and customers are limited to Keycorp bank machines if they want to avoid fees. The account has no balance requirements after it is opened with a minimum of $50.
Mr. Peterson conceded that the account doesn't make sense for everyone, but he said a growing number of customers use ATMs.
Like many other banks, Keycorp finds that customers are far more comfortable taking money out of teller machines than putting deposits in.
"A lot of folks are a little intimidated by the technology," said Mr. Peterson. "It's a little like the first time you pumped your own gas."
