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Winn-Dixie Stores Inc. overnight has become a force to reckon with in the automated teller machine business.

The $11 billion chain has purchased 900 machines, enough to rank 12th among deployers of proprietary ATM networks and third among nonbanks on the list, behind Electronic Data Systems Corp. and Affiliated Computer Services Inc.

Jacksonville, Fla.-based Winn-Dixie expects to have its cash dispensers, from AT&T Global Information Solutions Inc., installed by the first quarter next year.

The installations continue a trend toward ATM placement away from the traditional bank branch locations, which industry experts consider a saturated market.

With EDS expected soon to become the No. 1 ATM network owner, surpassing Bank of America's total of 5,400 according to Bank Network News, Winn-Dixie is accentuating the movement by nonbanks into a business that until a few years ago was thoroughly dominated by financial institutions.

"We're seeing a lot of parties who understand the fundamental economics of deploying off-premise ATMs," said Phil Kasper, director of North American marketing for the financial products and systems unit of Dayton-based AT&T Global. "In many cases these are not financial institutions."

Other nonbank participants in the ATM business include Publix Supermarkets Inc. of Florida, which has 535 units, and the computer services company Fiserv Inc., with 803.

EDS, ACS, Fiserv, and Publix all rank among the top 30 ATM deployers in the United States, according to Bank Network News' annual compilation.

Winn-Dixie's ATM purchase, which industry observers valued at about $15 million, brings enough terminals to rank in the top 15 propriety networks, ahead of such banking companies as Barnett Banks Inc., Norwest Corp., and Fifth Third Bancorp.

The reason for nonbank interest in the ATM business is not hard to fathom.

Since the nonbanks do not issue ATM cards, each transaction at one of their terminals results in an interchange payment from the cardholder's bank.

The high consumer traffic in supermarkets, and its demand for cash at the checkout counter, represents an especially significant revenue opportunity.

If Publix's Presto network, which dates back to 1982, is any indication, supermarkets may be the greatest off-premises ATM-revenue generators.

According to Bank Network News, the Lakeland, Fla.-based grocery chain averaged about 12,000 transactions per month for each of its ATMs in 1993. That is nearly twice the average volume for all ATMs nationwide.

While experts consider it unlikely that Winn-Dixie will match the mature Publix network's volume anytime soon, many assume it will be highly successful long-term.

Increasing the likelihood of initial traffic at Winn-Dixie ATMs is the fact that the supermarket's 1,140 stores do not yet accept credit cards or debit cards in their checkout lines, as a growing number of supermarkets do.

"By installing the ATMs, we serve customers who want to access money through credit cards for their purchases," said Mickey Clere, vice president of public relations at Winn-Dixie.

Mr. Clere added that Winn-Dixie Dixie stores will soon accept debit cards, including those associated with electronic benefits transfer programs.

Deluxe Data Systems Inc. of Glendale, Wis., will provide switching services for all ATM and POS transactions from Winn-Dixie stores.

Few banks have expressed alarm at the strides nonbanks like Winn-Dixie have made in the ATM business, because there seem to be plenty of ATM transactions to go around.

Transactions nationwide have grown by an average of more than 10% a year in the 1990s.

But financial institutions are not just sitting still as the nonbanks encroach on their turf. Many are installing off-premises ATMs that will compete with nonbank terminals.

According to an American Banker survey, the top banks in automated teller machines increased their off-premises installations by 11% in 1993.

The growth trend is good news to ATM vendors such as AT&T and InterBold, the Canton, Ohio-based joint venture of Diebold Inc. and International Business Machines Corp.

AT&T's Mr. Kasper said, "We the think off-premise deployments are going to be the big growth segment of the [U.S.] market."

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