Sparked by globalization and the worldwide recession, foreign banks are joining two of the nation's largest surcharge-free automated teller machine networks, Cardtronics Inc.'s Allpoint and U.S. Bancorp's MoneyPass.
Foreign financial companies say that the networks offer wider access to free ATM transactions for customers who are visiting the United States or have moved here.
Cardtronics, of Houston, said in April that ICICI Bank Ltd., India's second-largest bank based on assets, had joined its Allpoint network after opening a branch in New York. The Allpoint network offers members access to 37,500 ATMs in the United States and United Kingdom.
G.V.S. Ramesh, head of ICICI's New York branch, said in a press release then that the agreement "addresses the banking needs of Indians moving overseas by giving them access to financial services from the time they enter the United States."
Meanwhile, Total Bank, a unit of Grupo Banco Popular Espanol, Spain's third-largest banking company based on assets, is now a member of U.S. Bancorp's MoneyPass unit, which operates a network of more than 17,000 ATMs.
Total Bank has opened 12 branches in the Miami region.
Those relationships have prompted Allpoint and MoneyPass to pursue similar deals with additional foreign financial companies that have opened branches in the United States or that often send executives here on business.
"We are in discussions with banks based in Asia, Europe and Canada, and we expect to announce something in six months," said Ben Psillas, the president of Allpoint, of Bethesda, Md., said in an interview.
Douglas P. Miraglia, MoneyPass' president, said in an interview that his unit is participating in "ongoing discussions with banks in Canada, Mexico, Asia and England."
Miraglia said that U.S. Bancorp's international unit has periodically asked for MoneyPass executives to participate in discussions it has had with foreign banking companies.
Miraglia also said that MoneyPass was originally designed to serve U.S. banks and U.S. residents, and he was initially surprised to see that foreign financial companies are turning to U.S. surcharge-free ATM networks.
But Kate Monahan, an ATM analyst with the Boston research company Aite Group LLC, said international financial companies and U.S. surcharge-free ATM networks are a good pairing because providing access to free ATMs can keep expenses down for executives traveling to the U.S. on business.
"Many banks no longer allow executives to travel because of the global financial crisis, and when they do their budgets are much tighter," and employees often must keep a close watch on their expenditures Monahan said.
By joining one of the major surcharge-free ATM networks, foreign banks that are trying to expand their operations in the United States can offer customers who are visiting the country nationwide access to ATMs — without the hassle or expense of building extensive branch networks or deploying ATMs all over the country, Monahan said.
Moreover, surcharge-free ATM networks can serve temporary workers who move to the U.S. to work, but who want to continue using accounts with banks at home.
Temporary workers who do not have surcharge-free ATM access while working in the United States are likely to close existing accounts with the banks in their native countries and open new ones with banks in the United States so they can avoid paying fees to access their deposits, she added.
"Customer acquisition is on everyone's mind, and surcharge-free ATM networks enable foreign banks to keep their customers," Monahan said.
"The cost of joining a surcharge-free ATM network is minor compared to the aggregate deposits a bank would lose if customers do not have ready access to their money."
