With the summer shaping up as a sizzler for big bank mergers, rumors are flying that merger plans for regional electronic banking networks are heating up again.

The on-again, off-again merger talks between Chicago's Cash Station Inc. and Detroit's Magic Line Inc., for example, look to be very much on again - especially since the merger announcement this week by First Chicago Corp. and NBD Bancorp.

The two Midwestern networks, driven by the desires of some of their largest members, including the two merging banks, had agreed to merge in late 1993. But the agreement was called off by the following spring, reportedly due to nit-picking about which banks would get equity stakes in the merged entity.

"When we suspended our talks, it was with the understanding that there could be a second chapter," said Stephen S. Cole, chief executive officer of Cash Station. "The environment changes, and business changes, and I think the question of whether a merger is right for us will - appropriately - be raised again now.

For First Chicago and NBD, he added, the network merger would be pretty low on the priority list.

The announcement that those two banks plan to merge is not the only one fueling gossip on network consolidation.

No sooner had First Union Corp. and First Fidelity Bancorp. announced their merger plans last month than the years-old speculation revived about a merger of the NYCE and Honor networks.

Many automated teller machine networks are simply not waiting for the expected waves of consolidation. They are taking steps now to bolster their finances and product offerings, and entering into alliances with other networks in order to adapt to the changing business environment.

"Our industry has become extremely competitive during the last several years, and we needed to make a change to remain a significant player," said James H. Martin, president of Tyme Corp., a regional network of ATMs based in Milwaukee.

Late last month, the 449 Class A members of Tyme voted to convert to a for-profit, stock corporation.

The move, said Mr. Martin, would allow Tyme, ranked the 21st-largest network by Bank Network News, to attract capital for research and product development and react more quickly to changing business conditions and emerging opportunities.

Tyme's decision represents just one strategy for survival in the changing electronic banking world. Other second-tier networks have entered into alliances with the purpose of sharing resources and information.

One of the more interesting of these alliances is the Pulse-GulfNet partnership, announced early this year. The two Southwestern networks said they would work together on marketing, education, product development, and research.

Even Tyme is no stranger to alliances. When the network picked up the central switching functions of its counterpart EFT Illinois, the two networks also said they would work together on product development, research, and promotional efforts.

An intriguing alliance that has raised some eyebrows is one between Electronic Data Systems Corp. and the Exchange network in the Northwest. The two organizations say they intend to form a new company, and together explore product development.

Most of these developments - both outright mergers of networks as well as the quieter alliances - are not at all unexpected, say consultants.

"The motivation is changing business conditions," said a consultant who requested anonymity. "The regional networks are beginning to realize that they need to work together and not in competition."

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