The consolidation of automated teller machine networks accelerated Thursday as Magic Line in Michigan and Access 24 in Illinois announced a merger agreement.

Industry observers, who have been expecting the trend to spread to the Midwest, said the deal could set the stage for an even bigger combination between Magic Line and Chicago-based Cash Station.

Magic Line Inc., based in Dearborn, Mich., is the seventh-largest regional electronic banking system, with 6,671 ATMs. Including the 1,827 machines in Access 24, Magic Line would have 8,498 and rank sixth.

The two networks also reach a combined 105,886 point of sale terminals.

As in other such mergers - including NYCE and Yankee 24 in the Northeast two years ago and a pending deal between Honor and Most in the Southeast - Magic Line and Access 24 sought to become more efficient while being more responsive to financial institution members.

Further pressure is coming from superregional realignments in the banking industry. The merger that created First Chicago NBD Corp. combined the biggest banks in Illinois and Michigan, which stand to benefit if Magic Line and Cash Station become one.

"We certainly would be supportive of the new Magic Line talking to Cash Station about consolidation," said Thomas Tremain, vice president of electronic banking at First Chicago NBD.

The Chicago and Michigan networks had talked merger prior to First Chicago's purchase of NBD Bancorp, but did not reach agreement.

By adding Access 24, Magic Line will be increasing its monthly transaction total by three million, to 13.1 million, and institutions participating to more than 1,000, with 10.8 million cardholders.

Access 24 - the company's full name is Access 24/EFTI - has its headquarters in Rockford, Ill., and focuses on downstate Illinois markets.

John Bascomb, president and chief executive of Magic Line, said he expects the company to continue growing through mergers it becomes comparable to top-five players like NYCE Corp. and Southeast Switch Inc., the owner of Honor.

"We think the train has left the station in terms of a superregional Midwest network," said Mr. Bascomb. He will keep his titles after the Access 24 deal, which is expected to be completed within two months.

Mr. Tremain said the pact will not have much effect on First Chicago retail customers, because the bank has a small presence downstate. Still, he said, "We think the consolidation of midwestern networks is a positive thing."

Catherine Alexander, Cash Station's senior vice president of marketing, agreed, but she declined to discuss future plans. She said the Magic Line move isn't much of "a competitive threat. We've recently had a lot of success in Access 24 territory."

Joseph Majestic, vice president of Payment Systems Inc., a consulting firm in Tampa said Magic Line will get more competitive with other "mega- networks," but "without Cash Station, it leaves a big hole for them."

While the Midwest has many smaller networks ripe for mergers, Mr. Tremain said he did not expect "a cascading effect ...

There are some fairly big philosophical differences about the way some networks are run."

Magic Line and Access 24 negotiated for two years. Marc Horwedel, president and chief executive of the latter, said it "needed to find an organization with a similar (community banking) mindset and goals."

Mr. Horwedel, who will be the combined company's chief network officer, said Access 24 avoided "being dictated to later. (Networks) that don't move on this will be left in the dust."

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