A Canadian company is marketing devices designed to keep small-business customers from clogging teller lines with swollen deposit pouches and demands for coins.

The Frisco Bay Industries products - a coin dispenser and a deposit machine that accepts wider than usual envelopes - are intended, in part, to offer customers more flexibility. Barry Katsof, the St. Laurent, Quebec, vendor's chief executive, said the machines also can help banks cut construction costs and use staff more efficiently.

"They allow banks to provide merchants with self-service," Mr. Katsof said. "Merchants don't have to preplan their day according to when they're going to go to the bank to get change.

"Banks are looking for fee generation instead of people doing mundane tasks, like giving coins, where there is no fee generation," he added.

The machines work simply. For the coin dispenser, the merchant inserts either paper moeny or a stored-value card and selects the appropriate rolls of coins.

"Merchants can go get change at 8 o'clock, when the bank is closed," Mr. Katsof said.

Merchants use the self-service deposit machine in the same way they would make an ATM deposit transaction, except that the opening for the envelope is wider, Mr. Katsof said.

Since January, 12 U.S. banks - including big players such as Banc One Corp., Barnett Banks, and PNC Midlantic Corp. - have acquired the machines, which cost between $25,000 and $30,000 each.

The machines can be placed in a branch or can be freestanding devices in commercial centers, Mr. Katsof said. PNC Midlantic has installed one of each machine at a shopping center, he said.

"Banks don't have to rely on brick-and-mortar," he said.

Brian Tymon, product manager for PNC Midlantic, said the Pittsburgh- based banking company purchased five of each machine in January, and it may buy more.

"That's under study right now," Mr. Tymon said.

Mr. Katsof said other deals are pending and that he expects more sales as banks seek more cost-effective ways of handling small businesses.

A 1996 small-business banking survey by Price Waterhouse LLP demonstrated that about one-third of banks are looking for different ways to attract such business customers.

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