PNC Bank Corp. said it will be placing automated teller machines in 424 Wawa Food Markets, becoming the fifth-largest deployer of the machines at locations other than banks.

Pittsburgh-based PNC Bank already operates ATMs in 102 Wawa convenience stores in Pennsylvania, New Jersey, and Delaware. It plans to add about 50 machines a month and finish the installations by yearend.

PNC said it will purchase the cash-dispensing machines from Diebold Inc., Canton, Ohio, for more than $7 million.

The bank has about 500 ATMs at branches and 400 off-premises, making it the eighth-largest ATM deployer among banks and 10th largest overall. By yearend, the bank expects to have 600 in branches and 900 off-premises.

BankAmerica Corp. is No. 1 in total ATMs. Two computer service companies - Electronic Data Systems Corp. and Affiliated Computer Services Inc. - are in the top 10.

An American Banker survey last fall found that the nation's top 50 banks boosted the number of ATMs away from bank offices by 21% in 1994, compared with only 5% growth in branch-based ATMs.

At a time when nonbank competitors are pursuing off-premises locations with gusto, it is significant that PNC will become the third-largest bank deploying off-premises ATMs, behind BankAmerica and First Bank System Inc., and fifth when EDS and ACS are included.

"Increasingly, we view nonbanks as significant competitors in many areas of our business," said A. William Schenck 3d, executive vice president of consumer banking at PNC. "As a result, we are working aggressively to meet that competitive challenge."

PNC said its strategic focus is to boost the number of off-premises ATM locations while it modifies its historical dependence on a branch-based delivery system.

Late last year PNC announced a long-term plan to close up to 30% of its 612 branches in five states, taking up the slack with an enhanced telephone services center.

"Certainly, in terms of (deploying large numbers of ATMs), there will be a few big players," said S. Kere Lewis, senior vice president of Speer & Associates, an Atlanta-based consulting firm. "They tend to be those companies that have a transaction-oriented business," plus a clear understanding of the economics of the business.

Richard D. Wood Jr., Wawa's president and chief executive officer, said an ATM is the in-store feature that his customers most want from Wawa. The 526-store chain accepts cash only.

Initially, the new Interbold machines will dispense cash, answer balance inquiries, and conduct transfers. Mini-statements, stamp dispensing, and deposit acceptance will be added later.

Because Wawa is working with a bank in the MAC network - PNC is one of the owners of Electronic Payment Services Inc., the operating company - Mr. Wood said customers can avoid the transaction fees typically charged for non-network transactions.

PNC said its customers can make the transactions for 5 cents each, whereas noncustomers will pay 50 cents to 75 cents.

"One of the things I think people say sometimes about the ATM delivery system is that it's mature," said Mr. Schenck. "In fact, we're in our second generation of users of ATMs. Everybody that's coming into the economic cycle who needs banks seems to demand an ability to bank off- premises, 24-hours a day, seven days a week. As a result it is a growing business."

Wawa estimates there will be 25 million ATM transactions a year or, on average, about 4,000 a month per ATM.

"This territory of the MAC network has wonderful demographics from a consumer perspective. It has high(-transaction) ATM users," noted Tom Kunz, executive vice president of electronic banking at PNC.

The Wawa deployment in combination with PNC Bank's recent agreement to buy Chemical Bank's 84 branches in 15 New Jersey counties will give PNC a major presence in that state, Mr. Schenck said. PNC will gain 87 ATMs, primarily in the branches.

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