First Bank System Inc. last week signaled its commitment to be a full-service provider to merchants and retailers by agreeing to install 1,100 automated teller machines in Circle K convenience stores.
Industry observers say the rollout will be one of the largest in the country. "This puts them up there in terms of overall numbers of ATMs and cash dispensers," said Alan Pohlman, a partner with the consulting firm Carmody & Bloom Inc., Woodcliff Lake, N.J.
The $26 billion-asset Minneapolis banking company joined Circle K Corp. and AT&T Global Information Solutions in a multimillion-dollar agreement to install ATMs in seven of Circle K's 28 states, beginning in August.
"We have an appetite for this kind of business," said Philip G. Heasley, vice chairman of First Bank System. "We're very interested in being payment system providers. We want to get out of offering our services as a commodity and start being a value-added provider."
The agreement more than doubles the number of ATMs the bank operates. First Bank said it is the nation's 10th-largest owner of ATMs, and the fifth-largest provider of merchant transaction processing.
Has 200 at 7-Elevens
"There are probably only a handful of banking organizations who are up above 1,000 [ATMs]," Mr. Pohlman said, citing Bank of America and Citibank.
Last year, First Bank installed about 200 machines in 7-Eleven convenience stores in Colorado, Utah, and Kansas, plus 100 in Amoco gas stations. The bank plans to install more ATMs at retailing locations this year.
The convenience store "really serves a segment of population that is marginally handled by the banking system," Mr. Heasley said. "Consumers are demanding more convenience."
ATM placement outside of banks is one of the industry's driving trends, noted Raymond L. Miolla, vice president of financial systems at AT&T Global Information Solutions.
"The installation of ATMs in our stores is part of our strategy to provide additional services to our core customers-while attracting new patrons," said Jerry Snearly, Circle K vice president of finance.
Circle K, a privately held chain of about 2,500 convenience stores, said it chose First Bank because of the company's expertise with ATMs in retail outlets.
When the First Bank ATM installations are finished in 1995, Circle K said, it will pursue ATM installations in other markets around the country.
