Transaction volume dropped at many regional automated machine teller networks in April - following the green light for nationwide surcharging - but rebounded in May.

Some blamed the decline on negative publicity about surcharges, but tax season and a slowdown in activity on Easter Sunday were also cited.

Star System Inc., San Diego, saw a 7% drop in volume in April, from 27.4 million transactions in March.

Nikki Waters, Star's marketing director, said April's volume is always down around tax season, but it "dropped further this year because of the media hype over surcharging." May volume rebounded at the network, she added.

NYCE Corp. of Woodcliff Lake, N.J., reported nearly 5% fewer transactions in April, although relatively few banks in the Northeast have started surcharging. Volume returned to near normal levels in May.

Honor, owned by Southeast Switch of Maitland, Fla., said surcharges are raging like a wildfire through its region. Betsy Storm, a company spokeswoman, said volume dropped 12% in April and continued to drop, by 3.5%, in May. She said last year, April's transactions had increased 3% over March 1995 numbers.

H. Kurt Helwig, executive director of the Electronic Funds Transfer Association, a Herndon, Va.-based lobbying group, called the transaction dip "no concern to anyone." Volume typically drops up to 10% when surcharging is implemented but "bounces right back in a couple of months."

Ms. Storm noted that while volume slid at ATMs, point of sale transactions increased. From March of this year through May, debit transactions at retail locations were up 20%, compared with a 10% increase a year ago. "Maybe people are going to the point of sale for cash back" instead of using ATMs. At the majority of locations, point of sale transactions are free.

Magic Line saw a 2.5% drop in volume in April, though the Dearborn, Mich.-based network reported a 10% increase in volume in May, to a record 9.9 million transactions. Magic Line is one of the rare regional networks still banning the fees charged by ATM owners in its bylaws.

Cash Station Inc. said April's volume was higher than usual. The Chicago-based network will not allow surcharging until July.

Electronic Data Systems Corp. said volume at its ATMs was down slightly. Craig Dees, a spokesman for the Plano, Tex.-based data processing giant, said the shorter month and Easter Sunday contributed to the downswing.

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