As the marketplace for automated teller machines becomes more saturated, Wal-Mart Stores Inc., the largest retailer in the nation, has become as a prime expansion opportunity.

Tapping a guaranteed high-traffic zone, financial institutions have been deploying the cash-dispensing machines in several hundred Wal-Mart and Sam's Club locations nationwide over the past year and a half, seeking a competitive edge.

Wal-Mart has been providing space in its stores for ATMs and even some full-service branches, including a BankAtlantic branch scheduled to open in October in Wal-Mart's new "super center" location in Cape Coral, Fla.

The Bentonviille, Ark., retailer's work with banks began with Boatmen's Bancshares of St. Louis in May 1993, and it subsequently struck deals with, among others, Star Banc Corp., Cincinnati, San Francisco-based Wells Fargo & Co., BankAtlantic of Fort Lauderdale, Fla., and most recently, North Carolina-based Centura Bank.

"They are a driving force in the retail market; obviously it would be to our advantage to be where people are shopping," said Ernesto O. Gonzalez, vice president of community banking administration for BankAtlantic.

ATMs have been a source of fee income for banks. Those in nontraditional locations such as supermarkets or airports attract a much higher percentage of foreign transactions - ones from customers of other banks - generating fees of up to $1 a withdrawal, and sometimes more.

Mr. Gonzalez, who said BankAtlantic approached Wal-Mart regarding ATM deployment, explained that the card-issuing bank charges a fee to the consumer, which BankAtlantic shares in, usually between 40 cents and 60 cents a transaction.

Mr. Gonzalez said the bank would not impose surcharges for transactions made at its ATMs in 149 Wal-Mart and Sam's Club locations throughout Florida, as is the case at some ATMs at casinos and racetracks.

Even so, David Finkelman, BankAtlantic spokesman, said, "We would not undertake a commitment of this size without being quite optimistic about the fee income possibilities with Wal-Mart."

Mr. Gonzalez would not disclose income projections nor would he divulge any information as to BankAtlantic's financial agreement with Wal-Mart.

He said the retailer would not share any por on of the ATM interchange fees, but industry experts said that banks are most likely sharing some revenues with Wal-Mart, and might be paying rent to place the ATMs in the stores.

Les Copeland, public relations coordinator for Wal-Mart, said that agreements were proprietary information, but that the main purpose of installing ATMs is convenience for shoppers.

"We are continually working toward providing convenient opportunities for our customers," he said.

Even so, Patricia Morgan, director of electronic banking, Dove & Associates, a Boston-based consulting firm said, "I'm sure [Wal-Mart is] generating revenue from this."

Still, Linda R. Morris, retail analyst for PNC Bank, said convenience for customers was the most likely priority. "If you added up the money [from ATMs], its going to be a tiny percentage of the company's revenues," she said.

Ronald I. Mandle, senior research analyst with Sanford C. Bernstein & Co., agreed. "I think its the convenience - retailers want to do whatever they can to attract customers and give them a reason to come to their stores."

Mr. Finkelman noted, "Certainly it should bring convenience to customers and [the customers'] access to cash will bring increased revenues to Wal-Mart - that's the direction they're going in." Some Banks in Deals With Wal-Mart Stores BankAtlantic 149 Fla.Boatmen's 150 Mo., Ill Iowa, Kan., Okla., Ark., N.M., Tex.Centura 95 N.C.Star Bank 36 Ohio, Ky.Wells Fargo 48* Calif.* estimated

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