New Varsity Letters - ATM - Proliferate on Campuses

Looking to increase revenue from automated teller machines, a number of financial institutions are installing more of them on college campuses across the country.

According to a survey by Plus System Inc., the Denver-based ATM network, people 18 to 24 years of age use ATMs more than any other demographic group.

This has driven average transaction volume at campus ATMs to double the average at other locations.

Fee Income

And because relatively few college students maintain accounts near school, most transactions processed by the campus machines are shared-network transactions, which generate fees for the financial institution that operates the ATM.

Transaction volume on some campuses tends to taper off during the summer, when school is not in session. Still, bankers said, annual traffic at the college machines greatly exceeds the average at most others.

Several institutions, including Shawmut National Corp., Hartford, Conn., and Fleet/Norstar Financial Corp., Providence, R.I., have begun to increase the numbers of their ATMs on college campuses. Plus System has 500 cash machines on campuses and more coming.

"There are still schools that do not have ATMs," said Margaret Steeves, director of marketing for New England Network Inc. "And believe me, we will not be forcing anything on them if we put one or two in those places." New England Network, based in Wallingford, Conn., runs the the Yankee24 ATM network.

Ms. Steeves said that students at a number of schools, including Yale University, are clamoring for on-campus ATMs.

Bankers and other industry watchers have commented that placing a few machines on college campuses is unlikely to affect a financial institution's bottom line by more than a few thousand dollars either way.

A Focus on Revenue

But in the larger picture of ATM strategy, the search for sites that generate high volumes of so-called foreign transactions is significant. It indicates that bankers who used to see the machines mostly as cost cutters or as tools for customer service increasingly view them as revenue producers.

"There are more and more banks looking at their ATMs as money makers," said Gerard Hergenroeder, a vice president at Baltimore-based Maryland National Bank.

"One by one, the revenue-producing moves may not look like much - but in the aggregate they can mean a lot."

Mr. Hergenroeder said he expects to see more banks trying to squeeze revenue from their ATMs in the years ahead.

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