BofA Adds ATM Functions, Fees

  Bank of America Corp. spent the summer expanding its deployment of envelope-free ATMs. And to help pay for the rollout, the nation's leading bank-ATM deployer raised the surcharge fee it charges noncustomers who use its machines.
  By mid-July, BofA had replaced more than 2,500 of its ATMs in 12 U.S. markets, including Chicago and Washington, D.C., with machines that allow customers to make cash and check deposits without envelopes or deposit slips. The bank plans eventually to convert all of its more than 12,000 deposit-accepting ATMs to envelope-free machines. BofA's entire fleet consists of about 17,200 machines.
  BofA has yet to set a timeline for when it will finish converting all of its deposit-taking ATMs, spokesperson Betty Reiss says.
  With the envelope-free ATMs, customers receive immediate credit for cash deposits and same-day credit for check deposits until 8 p.m. in the state where the account is located. The ATMs scan the checks, count the cash and give receipts displaying an image of each check and a verification of the cash amount. An envelope-free ATM decreases processing time for the bank, which is one reason BofA can extend the end-of-day deposit time for customers, Reiss says.
  BofA conducted an envelope-free ATM pilot at the bank's Charlotte, N.C.-based headquarters in 2003 and began a national rollout last year.
  "Bank of America has spent a lot of money in the past five years upgrading its whole ATM program," says George Albright, chairman of Speer & Associates, an Alpharetta, Ga.-based consultancy. "They have determined that, not only are they going to have the most ATMs of anyone in the United States, they're going to have the best."
  Those spiffy ATMs come at a steeper price for users who do not have accounts with BofA, however. In late July, BofA raised its surcharge fee to $3 from $2 for noncustomers who use any of its 5,700 freestanding machines and those deployed in bank branches in 31 states and Washington, D.C., Reiss says.
  "We operate the largest ATM network," Reiss says. "To continue investing in it, we have to charge nonbank customers."
  BofA was expected to finish rolling out the surcharge-fee increase nationwide by Aug. 31. The surcharge fee will remain $2 at the bank's 6,300 off-site ATMs deployed at airports, malls and college campuses, she says.
  Albright does not believe other banks necessarily will follow suit in raising their ATM surcharge fees. And he says BofA cares more about drawing more accountholders than about losing noncustomer ATM users.
  "Bank of America's saying, 'I have this very valuable ATM program, and there's a good reason for you to come and bank with me,'" Albright says. "It's the Big Dog Theory: I've got the most, and I've got the best. You either play by my rules, or you pay to use it."
  The exception to that theory is in markets such as Chicago, where BofA is not as big. Chicago is excluded from the fee hike because BofA deploys only 231 ATMs in the Windy City, making it an "emerging market" for the bank, says Reiss. BofA's planned fourth quarter purchase of Chicago-based La Salle Bank Corp. would add an additional 450 ATMs in Chicago to BofA's portfolio.
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