The board of directors for Cirrus System Inc. will vote next month on a proposal to allow the international network of automated teller machines to accept deposits.
The move represents the latest chapter in a contentious industrywide debate over the necessity of shared ATM depositing within a national network.
"This whole issue is a tempest in a teapot," said Joseph E. Wallace, director of System B Division, Chicago.
"Locally, I think there is a convincing argument that people want convenience," said Mr. Wallace, "but there just aren't too many cases where people are going to make deposits in faraway locations."
If the Cirrus board passes the rule, consumers holding an ATM card with a Cirrus logo would be able to make deposits into any ATM in the network, not just those belonging to their bank.
Some of these cardholders may already be able to do so, because of proprietary agreements between banks, or arrangements with regional networks, most of which support the deposit function.
Few consumers take advantage of the service, however. In fact, few consumers are comfortable depositing funds into their own bank's ATM.
Research shows that only 15% of all ATM transactions are deposits, and only about 7% of the U.S. population has used an ATM to make a deposit.
H. Eugene Lockhart, president of MasterCard International and a member of the Cirrus board, believes he can effect a change in consumer attitudes.
In a recent speech at the Smart Card Forum, Mr. Lockhart said national ATM deposit taking is a necessary adjustment for the interstate banking era. He suggested that consumer receptivity to the idea would grow if a large number of ATMs offered that function. Cirrus links 243,760 ATMs worldwide.
Though it is impossible to predict whether the Cirrus board members will be swayed by Mr. Lockhart's argument, it may be instructive to recall how Plus System Inc., Visa's ATM network, handled the debate.
"We didn't sense a ground swell of demand for ATM deposit sharing on a national basis," said Ron Reed, senior vice president of Plus System.
Mr. Reed noted that the board of directors for Plus discussed the issue at much length at their April board meeting, and decided not to endorse ATM deposit sharing at this time.
Mr. Reed said that while the members agreed that deposit sharing could provide incremental value to members and customers and would offer differentiation, there were three huge areas of concern.
First, he said, is the potential for fraud. Bankers are forced to comply with funds availability schedules, which could become problematic if a deposit is made into another bank's machine halfway across the world.
Second, said Mr. Reed, the United States is a patchwork of state regulations, some of which allow ATM deposit-sharing, and some of which expressly prohibit it.
The third, and most important area of concern to the Plus board, said Mr. Reed, was cost.
"Member banks that are already doing shared deposits - through proprietary agreements or through arrangements with a regional network - cautioned (the board) that it is very labor intensive and comes at a very high cost," he said.
"It is very expensive," agreed Thomas M. Rouse, executive vice president of Dallas-based Affiliated Computer Services Inc., which runs the MoneyMaker network.
Mr. Rouse said some banks are paying as much as $2 or $3 to process and settle these deposit transactions.
"We own 3,500 ATMs, and if we believed this was going to be a money- maker, we would be out there pushing this," said Mr. Rouse. "But we're not, and I have to say that I just don't think there's going to be a lot of interest."
Even the regional networks, which already facilitate ATM deposit taking, say demand is low.
"Not everybody wants to do it," said Richard G. Lyons, executive vice president and chief operating officer of Internet Inc., the Reston, Va.- based company that operates Most, the nation's fifth-largest ATM network. "I don't think there's ever going to be a huge demand. I don't think it will even reach 10%" of overall transaction volume.
