A survey from Speer & Associates supports the widely held contention that an increasing number of financial institutions are charging for use of their automated teller machines.

According to the survery, which polled 105 financial institutions of various sizes, about 87% of banks assessed some kind of fee for ATM use in 1993. This represents a significant jump from 1992's 78%.

About 29% of the responding banlks charged for on-us withdrawals, in which a customer of a bank withdraws cash from an ATM owned by the same bank. About 65% of the banks charged fro foreign withdrawals, which occur when a customer of one bank uses an ATM owned by another.

"Over the last year, it's become almost unanimous that banks are charging for foreign transactions," said Thomas O. Bennion, president of Southeast Switch Inc., the Maitland, Fla.-based parent of the nation's fourth largest ATM network, Honor.

"And we are also increasingly seeing banks charing their own customers for ATM use."

Average Fee Rising

As the number of banks charging for ATM transactions rises, so, too, is the average fee per transaction. The most expensive average transaction fee was $1.06 for a foreign withdrawal, according to Speer.

The fact that fees have hit that level is significant, because experts have said that consumers would react negatively to charges of more than $1.

Some went to far as to predict that such fees could have a negative effect on ATM transaction traffic. Yet most evidence so far points to the contrary.

Even as fees rise at an uprecedented pace, consumers continue to expand their use of ATMs.

According to figures from Bank Network News, the number of total ATM transactions in the United States has grown by an average of more than 11% over the past five years.

Even as the number of ATMs in the United States has grown at an annual rate of almost 6% per year to more than 95,000, the average number of transactions handled by each ATM has risen.

According to the Speer study, average monthly ATM transactions per terminal have grown steadily over the last half-decade to 5,274 in 1993.

Simple mathematical logic says that banks are making more monay that ever before on their ATM systems. However, that does not mean financial institutions are making a killing.

In the past, ATMs were money losers at many banks. The terminals, originally expected to help reduce the most of employing live tellers, wound up raising costs at many institutions.

Some experts view the recent surge in fees as an attempt to compensate for the ATM's less profitabl,e years. Others see the fees as simple opportunism: charging what the users will bear.

While network executives say there has been little tangible negative reaction of the part of consumers to increased fees, bankers should note the trend has not gone completely unnoticed by those outside the industry.

Criticism from Consumer Group

The Consumer Federation of American recently issued a report that accused banks of not passing the benefits of improved ATM transaction efficiencies on to the consumer.

More scating yet was a recent column is a Chicago newspaper comparing bankers to drug dealers for the way they introduced their customers to ATMs without charge but then moved to significantly raise the price of the service once customers became addicted to it.

With consumer watchdog agencies and newspapers on alert, some experts fear that regulatory attention is not far behind. As such, many are recommending that bankers who want to retain control of ATM pricing in the future establish reasonable fee policies now.

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