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Three major surcharge-free automated teller machine networks discussed this week how they are expanding to help their financial company clients compete against large, bank-owned networks.
Allpoint Network, a unit of Cardtronics Inc., announced this week that it would expand into the United Kingdom in November by connecting with the 2,500 ATMs operated by Bank Machine Ltd., another Cardtronics unit.
Cardtronics, of Houston, is the world's largest ATM independent sales organization, with about 37,000 machines.
During a panel discussion Monday at the ATM, Debit & Prepaid Forum in Phoenix, Ben Psillas, Allpoint's president, said his Bethesda, Md., company is thinking of expanding in Mexico, where Cardtronics Mexico of Mexico City operates 1,541 ATMs. The conference was organized by SourceMedia Inc., which also publishes American Banker.
Jim Hanisch, an executive vice president of Co-op Financial Services in Rancho Cucamonga, Calif., which manages a network of 28,000 ATMs owned by credit unions, said surcharge-free networks often work together to help their clients extend the reach of their ATM networks.
For example, in December 2007 Allpoint announced that it had signed a two-and-a-half-year contract with Credit Union 24 of Tallahassee, Fla., to form CU Here Premium, the nation's largest surcharge-free ATM network for credit unions, with 50,000 machines nationwide.
MoneyPass Network, which operates more than 13,000 ATMs, has committed its machines to CU Here Premium. MoneyPass is operated by U.S. Bancorp's payments unit, Elan Financial Services.
Surcharge-free networks are generally aimed at community banks and credit unions.
Jim Gowan, an executive vice president and the chief operating officer of Credit Union 24, said expanding the networks makes them more competitive with the large ATM fleets owned by banks, such as Bank of America Corp., which owns 18,531 ATMs, and JPMorgan Chase & Co., which owns 14,272.
Surcharge-free ATM networks can help credit unions and community banks that may have a small number of ATMs become part of a much larger ATM network.
In addition, community banks and credit unions can tout their participation in nationwide surcharge-free ATM networks as a way to help retain and attract customers, Mr. Psillas said.
Douglas P. Miraglia, the president of MoneyPass, said large national banks sometimes join surcharge-free ATM networks as a defensive measure, to offer ATM services to customers located in areas where the companies lack branches.
MoneyPass, which has about 13,000 ATMs, plans to add 3,000 in December when InterCept Switch Inc. of Norcross, Ga., links the 3,000 machines in its network to the MoneyPass network, Mr. Miraglia said.
MoneyPass also announced it has signed an agreement to connect its ATM network with NYCE Payments Network LLC's SUM selective surcharging program. The SUM selective network allows cardholders of participating financial institutions to make surcharge-free withdrawals at about 2,950 ATMs. (NYCE is a unit of Metavante Technologies Inc., of Milwaukee.)
Co-op Network offers surcharge-charge free access only to credit unions. Allpoint and MoneyPass serve community banks, large banks, and credit unions. All three networks offer nationwide coverage to financial clients, which typically pay monthly fees.
