Transaction volume at bank-owned automated teller machines rose 5% in 1996, but the average traffic per terminal went down, a study says.

Speer & Associates Inc. found the number of ATM transactions rose from 13 billion in 1995 to 13.7 billion last year. Yet average volume at each machine declined 8%, to about 5,400 transactions per month.

The consulting firm, which does an annual survey of electronic funds transfer programs, found that the number of ATMs had risen 9% in 1996, which caused per-machine volume to fall.

Speer counted 140,000 ATMs at yearend 1996 and projects 170,000 by yearend 1997. The rapid rise in machines forced the per-ATM transaction average down for the first time in several years.

Faulkner & Gray's Bank Network News, by contrast, has shown monthly transactions per machine falling in three of the last four years.

George L. Albright, president of Atlanta-based Speer, said banks' enthusiasm for ATMs in 1996 was fueled by their ability to impose fees. It was last year that many machine owners took advantage of the power to charge noncustomers $1 or more, raising the profitability of ATMs in such locations as convenience stores and gas stations.

"The widespread proliferation of surcharging has dramatically changed the economic model for ATM placement," Mr. Albright said.

While more ATMs are being installed away from bank premises, they do not seem to have cut into the volume of transactions at ATMs in branches.

At BankAmerica Corp., for instance, "transaction volume is high and continues to be high at the ATMs at our branch locations," said Harvey Radin, spokesman for the San Francisco banking company.

At off-premises sites, he said, "it would be expected that the transaction volume would be lower."

The Speer study shows further evidence of the effect that surcharging and transaction fees have had on the ATM landscape. The study found that in 1996, incoming interchange activity made up 39% of all transactions, down from 43% in 1995.

But Mr. Albright said he saw no slowdown in the race to install ATMs: "There is a bit of a feeding frenzy."

Speer surveyed 100 banks, savings and loans, and credit unions in the United States, Canada, and Puerto Rico.

The survey did not include nonfinancial institutions, which are shipping more and more ATMs. Mr. Albright said Speer only wanted to analyze ATM owners that are also card issuers.

Stephen S. Cole, president and chief executive officer of Cash Station Inc., Chicago, said, "You are going to see a huge shift in ownership from banks to nonbanks."

In 1996, 48% of ATM shipments were to nonfinancial institutions, according to Mentis Corp., a consulting firm in Durham, N.C.

Nevertheless, big banking companies are getting in on the off-site ATM act. Banc One Corp. just signed a deal to install 820 machines in Sears, Roebuck and Co. stores. Bank of America has installed about 400 ATMs in off-site locations in the last four months, Mr. Radin said.

Nobody knows when the pace of installations will slow, Mr. Albright said.

"I don't think you'll put ATMs in private homes, but the (economic) models have come down so that you can justify very low volume levels," he said.

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