Profitable Fees Spur Spread of Automated Teller Machines

Article excerpt

Chevron stations are quickly becoming places where you can fill up your wallet as well as your gas tank.

Since August, the San Francisco-based oil giant has installed automated teller machines at 457 of its 600 company-owned gas station convenience stores in 11 states. As many as 5,500 of 7,500 independently owned Chevron brand stations and convenience stores around the country also might add ATMs.

Cash machines have been spreading well beyond banks and supermarkets. They are popping up in airports, amusement parks, bars, bowling alleys, casinos, colleges, hospitals and hotels. There are now more than 165,000 ATMs around the country. That's up more than 26,000, or nearly 20 percent, from 1996, according to the trade publication Bank Network News. The number of "off- premise" machines owned by banks and others like Chevron have more than doubled since 1994 to 67,000. Banks still control 75 percent of all ATMs, including those located off-site. But more machines are being located away from banks. "Previously ATMs were a customer convenience," said John Hall, spokesman for the American Bankers Association. "At best they broke even or made a tiny profit." That has changed since the two national ATM networks, Plus and Cirrus, ended their bans on surcharging noncustomers a year and a half ago. Today consumers who use an ATM that is not owned and operated by their own bank pay an average $1.11 fee for the privilege of extracting cash. That is on top of the typical 55-cent "interchange" fee that the ATM owner gets from the user's own financial institution. Most owners charge $1 to $1.50 in transaction fees. But casinos commonly impose a $5 surcharge and some take as much as $10, according to Bank Network News. Chevron is following the example of some of the biggest ATM network owners -- No. 1-ranked BankAmerica and No. 4-ranked Wells Fargo -- and collects a $1.50 surcharge. Chevron would not comment on the economics of its ATM commitment. But John Jorgenson, a Chevron convenience store retail manager, said, "If we have 1,000 transactions per location per month, I'd be a happy camper." ATMs don't come cheap. The machines Chevron buys from NCR cost about $15,000 each. On top of equipment costs, owners generally pay $1,000 to $2,000 a month to maintain the machines, including cash replenishment, servicing, telephone costs and rent. …