Chevron Products Co. has ordered 600 automated teller machines for its convenience stores and tapped Minneapolis-based First Bank System Inc. to manage them.
First Bank vice chairman Philip G. Heasley put the deal in the same "large order" class as the 1,000-machine contract with Circle K convenience stores in 1994.
Mr. Heasley said the business with Chevron "complements the expansion of our ATM network and our desire to be the preferred payment system for retail merchants."
NCR Corp. is supplying the machines.
Several financial institutions have recently won contracts from retailers that had ordered a lot of ATMs. More such deals have been concluded since April 1996, when Cirrus and Plus ended bans on surcharges at owner-operated ATMs.
Some retailers that own ATMs charge $1 to $2 per cash withdrawal.
Several factors are prompting big retail chains like Chevron to make major commitments to ATMs, analysts say.
Prices of the machines are coming down, and new dial-up communications software allows owners to avoid using expensive dedicated telephone lines.
But surcharging has been "the biggest impetus," said Michael A. Strada, president of Electronic Commerce Strategies Inc., Atlanta. "Everyone wants into that market."
Chevron plans to start deploying its new machines in August at company- owned convenience stores in 11 states-nine in the Southeast and West, plus Alaska and Hawaii.
It hopes to later put ATMs at independent dealer and distributor sites- up to 6,000 of them.
Noting retailers' growing interest in owning ATMs, NCR Corp. has aggressively pursued the convenience store market, said Mark McCall, a spokesman for the Dayton, Ohio, company.
Mr. McCall said the sale to Chevron was "medium-size"-half as big as NCR's largest ATM deal.
Even as ATMs continue to proliferate in retail outlets, some observers contend the market is already saturated.
Paul R. Martaus, a payment systems consultant in Clearwater, Fla., said he wondered whether ATMs at retailers' will be profitable, given the growth in point of sale transactions.
He said owners will think twice if machines fail to process a break-even number of transactions each month. "If you don't get that many clicks per machine," he said, "you're not going to keep your machine." u