The automated teller machine elite got bigger and stronger last year at the expense of smaller competitors, according to a study by Speer & Associates Inc.

Continuing the industry's consolidation trend, the combined processing volumes of the top 20 regional ATM networks increased by 10% in 1992, to a monthly average of 139.1 million. That gain came even as overall ATM-transaction growth began to level off.

As a result, the 20 accounted for 89% of ATM interchange transactions processed by all of the approximately 75 networks.

Speer, an Atlanta-based consulting firm, bases its survey on interchange transactions - essentially, those performed by customers away from their own banks and processed through network switches.

MAC Leads the Pack

By this measure, the Pennsylvania-based MAC network led the country last year, with average monthly volume of 25.7 million. The figure was down slightly from 1991 but is poised to soar as the result of mergers.

Other surveys have shown that when all ATM transactions are considered, including those that do not make their way through network processing centers, California-based Star System is No. 1. Star ranked second in interchange volume at 18.4 million a month, a 63% increase.

"The smaller networks are growing at a slower rate, which makes them candidates for acquisition," Speer & Associates chairman Richard Speer said in his report.

Over the last year alone, there has been significant merger activity.

Joint Venture of 4 Banks

Electronic Payment Services Inc., which operates MAC, last year became a joint venture of the network's originator, Core-States Financial Corp., along with Banc One Corp., PNC Bank Corp., and Society Corp.

This year, NBD Bancorp merged its operations into the Michigan-based Magic Line network.

In addition to those completed deals, merger discussions in the Midwest and Southeast are expected to lead to further consolidations over the next year.

Speer's 1992 survey showed that 16 networks averaged more than three million interchange transactions apiece per month, and each of the top 10 averaged more than five million.

Mr. Speer said he expects the top 20 to continue to increase interchange volume by 10% to 15% for each of the next three years.

As the bulk of interchange transactions remain concentrated among the top players, most experts believe, smaller networks will be squeezed out or swallowed up. Speer estimates there will be only 20 to 25 networks by 1998.

Aside from their transaction volume, the top 20 networks also increased their aggregate cardholder base by 9% in 1992, to 141.5 million.

The networks do not expect to add many ATMs over the next year: The U.S. market is considered nearly saturated - with about 86,000 units installed.

But "the survey respondents have indicated that they again expect significant growth in point-of-sale-related activities," said Richard Kisida, a senior vice president at Speer. "The number of POS terminals are projected to grow seven times faster than the growth in ATMs." !!!BEGIN TABLE The Top Five Regional Networks Average Average monthly ATM Interchange Interchange per card per year1 MAC 25,657,056 16.72 Star System 18,446,215 8.93 NYCE 16,049,511 9.34 Honor 10,744,752 7.05 Exchange/Accel 7,285,714 15.9

Source: Speer & Associates, 1992 data !!!END TABLE

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