Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 23, 1993 TAG: 9305210042
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: WALTER HAMILTON LOS ANGELES DAILY NEWS
DATELINE: LOS ANGELES LENGTH: Long
Far from their original role as cash dispensers, ATMs have blossomed into a symbol of consumer convenience offering an array of services.
Some banks sell stamps, bus tickets and even mutual funds at ATMs. Many ATMs print out mini-statements listing recent checking account transactions. Retailers such as the 7-Eleven convenience store chain now rely on them to lure customers who spend more money in their stores if they have access to cash.
Experts say those functions are merely a prelude to the services ATMs will perform in coming years.
"There are all sorts of possibilities in what ATMs are capable of today and things in the future that haven't even been dreamed up," said Dan Stiel, ATM product manager at Los Angeles-based First Interstate Bancorp.
A series of ATM robberies, centered most recently in California, including the stabbing death in March of a pregnant woman at a machine in suburban Sherman Oaks, Calif. focused attention on ATM safety. That concern was capped this month when the Los Angeles City Council approved a pilot program to install ATMs in two police station lobbies, including one in suburban Northridge.
Though people are more cautious about using machines at night, their use is growing.
A Pittsburgh bank has an ATM-like machine with two-way video communication at a local airport that lets customers perform extensive banking functions while talking to and looking at a bank employee, said Neal Chambliss, research director at Tampa, Fla.-based PSI, a bank research and consulting firm.
ATM debit cards, which customers use to make store purchases the same way they do with credit cards, are expected to become common. In such transactions, the purchase amount is subtracted directly from a bank account.
Another idea under development would enable ATM cards to be used at vending machines, telephones and parking meters. Cards would be equipped with tiny computer chips with customers purchasing "credit" at ATMs that could be used elsewhere.
"The machine itself is becoming in some ways a one-stop financial center," said Sean Kennedy, president of the Electronic Funds Transfer Association, an Alexandria, trade group.
Heightened awareness of the safety issue has caused some people to alter how and when they use ATMs, but it has yet to slow their growth and overall use among consumers who prize convenience, according to bankers and analysts.
The number of ATMs nationwide grew to 87,330 last year from 83,545 in 1991, according to statistics compiled by Bank Network News, an industry publication, and the Bank Administration Institute. The transactions on those machines climbed to 7.2 billion through September, up from 6.4 billion in 1991.
At Bank of America, for example, the number of new ATM users has expanded greatly in the last two years, said Deborah Doyle McWhinney, head of ATM banking.
"Over the last couple of years the growth has really been enormous. We're not seeing the fear factor impact the growth of new ATM users," McWhinney said.
Building on the uses of ATMs is important for banks and local retailers, who view cash machines as a key marketing tool as they compete to draw and retain customers. Since many consumers choose their banks on the basis of convenience, ATMs with a variety of functions are an asset.
"One of the major reasons for selecting a bank is for convenience, and the more convenient you can be to your target audience the more likely you are to get and keep their business," Stiel said.
First Interstate distributes grocery coupons at some of its Texas banks and casino coupons at Nevada branches.
Having ATMs once enabled larger banks to differentiate themselves from their smaller brethren but today institutions of all sizes have cash machines. With falling interest rates causing traditional bank customers to leave in search of better returns, full-service ATMs let banks retain depositors.
ATMs at locations such as malls and supermarkets allow a bank to market itself to potential customers as well as to generate income through the service fees those customers pay.
"It's an opportunity to market to a noncustomer because when the machine is processing a transaction a message will come up on the screen saying, `Have you heard about our CD rate or our mortgage loan?' " Chambliss said.
Retailers also use ATMs as marketing tools to draw customers. For example, the Southland Corp. has almost 2,000 ATMs at its 7-Eleven convenience stores, including about 490 Money Quik machines at its 570 Los Angeles-area stores, said Karen Raskopf, a company spokeswoman.
"It's an advantage to us. It increases the number of people who come into our stores," she said.
Robberies at ATMs remain rare compared to the number of overall street robberies, according to Los Angeles Police Department statistics. Of the 9,604 robberies in the first three months of this year, only 62 were classified as ATM-related, said Lt. Ken Lady of the department's robbery/homicide division. Of 39,200 robberies in 1992, 152 were at ATMs, he said.
California banks must comply with state ATM regulations mandating the level of lighting and other safety features of the machines, said Bill Wipprecht, security director at Wells Fargo Bank.
Virginia has no laws concerning security at ATM machines, according to Walter Ayers, executive director of the Virginia Bankers Association. He said that bank robbery, although rare, is more of a problem than crime related to ATMs.
To meet the new California laws, Wells Fargo also has installed surveillance cameras at 100 ATM locations in four California cities, limited the hours of operation at a few machines in high-crime neighborhoods and is testing a pilot program that uses mirrors to enable customers to see someone approaching from behind, he said.
The first cash-dispensing machine was unveiled in Enfield, England, on June 27, 1967, according to Linda Fenner Zimmer, an ATM researcher. Chemical Bank in New York introduced the first U.S. cash dispenser in 1969.
The first ATM - which accepted deposits and performed other functions in addition to doling out money - was unveiled by Citizens and Southern National Bank in Atlanta in 1971, she said.
Banks early on viewed ATM machines as little more than marketing gimmicks to spark customer curiosity, Zimmer said. Banks didn't expect them to catch on because they felt customers would never feel comfortable using machines instead of tellers, she said.
The change in attitude came in 1975 when Citibank in New York installed 500 machines and competitors saw their marketing value, she said.
As technology permits banks to offer an ever-increasing menu of ATM functions, many banks have to figure out which services they want. Bankers say they must balance the availability of new services with the need to keep the machines convenient and the lines short.
"Nobody likes being stuck behind somebody taking five or 10 minutes to complete a transaction," Stiel said.
Staff writer Mag Poff contributed to this story.
by CNB