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Banks giving ATMs the ax?

By Claes Bell, CFA · Bankrate.com
Friday, July 27, 2012
Posted: 10 am ET

Used to finding a Bank of America ATM whenever you need one? Don't look now, but that could be changing.

This year, Bank of America has cut a record 1,536 ATMs, or about 9 percent of its total stock, write Hugh Son and Zachary Tracer of Bloomberg:

Bank of America chose to pull most of its ATMs at malls and gas stations in part because those devices only dispensed cash and weren’t available 24 hours a day, (Bank of America spokeswoman Anne) Pace said in an interview. Customers want to be able to deposit checks at an ATM, she said.

"It's about convenience and access, that’s what the customers are looking for," Pace said. "People aren't banking 9 to 5, they are banking when it’s convenient for them."

It costs banks an average of $1,700 per month to run an ATM on someone else's property, compared with $1,100 at a branch, said Tony Hayes, a partner at consulting firm Oliver Wyman in Boston. The difference stems from rental costs and fees for armored couriers to refill machines with cash, he said.

But is BofA's move an isolated event, or a sign that large banks are starting to abandon ATMs? Ann Carns of The New York Times Bucks Blog writes that it's more likely the former:

Other big banks say they have no plans to shrink their networks. JPMorgan Chase, the largest bank by assets, said it planned to expand its system. A Chase spokesman said in an email that the bank had more than 17,500 ATMs, "and that number will grow as we continue to build branches."

Citigroup has 10,428 Citi-branded ATMs, a spokeswoman said, including more than 6,000 machines at 7-Eleven stores, and has no plans to reduce those numbers.

Wells Fargo says it has about 12,000 ATMs since its merger with Wachovia, and has no plans for any changes.

U.S. Bancorp has 5,085 machines and has no plans to pull back on its network, a spokeswoman said.

Like Carns, though, I wonder about the long-term trend. Notwithstanding the old cliché, "cash is king," cash has grown increasingly rare as electronic payment methods like credit and debit become more ubiquitous.

I think as technologies like smartphone-based remote deposit capture and person-to-person payments become easier to use and more widely adopted, there will be fewer and fewer reasons to seek out an ATM, in the same way that the rise of cellphones has killed off the payphone. After all, if you have a device in your pocket that can perform many of the functions of an ATM, why go out of your way?

But in the meantime, having an extensive ATM network customers can use without paying an annoying fee is one of the major ways large banks differentiate themselves from community banks and credit unions, and so they'll continue to invest in them for the time being.

What do you think? Is a big network of ATMs important to you? Are ATMs on their way out, or will people always want easy access to cash?

Follow me on Twitter: @ClaesBell

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175 Comments
mary
August 16, 2012 at 5:36 pm

Being proud of using a cashless system to pay your bills is like walking proudly into a cannibals cooking pot. The government can and will track all your moves and purchases.

Kevin
August 14, 2012 at 11:28 pm

I'm the opposite - I recently became a heavy ATM user because I switched to all cash, no plastic. It's both a matter of managing finances (it's too easy to accumulate bad debt) and also of privacy.

Wayne
August 14, 2012 at 8:47 am

Though I'm biting my nails at the advent of the prophesied cashless society, I too rarely use an ATM anymore. My credit union recently installed new envelope free ATMs that allow you to deposit checks at all hours of the day or night. The new machines have optical character recognition and have never missed a beat. Nevertheless, paying a fee for cash from an ATM is ridiculous since all you have to do is buy gum at a supermarket and you can get cash back. So unless for some unforeseen reason you need a larger amount (you didn't plan) or it's the middle of the night and nothing's open, there's little cause to seek out an ATM.

Bob
August 13, 2012 at 4:35 pm

ATMs were the main reason I stayed with BofA, but after some bad experiences, the bank bailout, which was cause, in part, by the banks being too big, and learning of BofA's policy of accepting Matricula Consular Cards, so that illegal immigrants can open accounts, I switched to a small local bank.

With their multi-bank ATM network, there are plenty enough locations for me.

Kathi
August 13, 2012 at 3:51 pm

Not using ATMs now or very rarely. I usually get cash from POS using debit card at stores. Pay most things online. My credit union recently got that app for iPhone where you can take pictures to deposit checks. Don't get very many checks anyway as my income is mostly direct deposit. Also credit union has express branch in Stater Bros right near where I live so can use that if I need to & tend to use that rather than their ATM at same location. But not even needing that much.

Don't like Chase. My Dad had account at local bank that was taken over by another then another & then WaMu. Then around the time he died it was taken over by Chase. We had trust accounts we had to switch & they made us open new accounts rather than just, changing trustees. & when I had to make deposits, they were not flexible at all.Even the tellers commented that Chase did not allow manager discretion like WaMu had to allow getting cash immediately from a deposit from a major institution.

They kept sending me offers which I was not the least interested in after the way they treated me. One time I made a deposit & since they wouldn't give me the cash then I had to make a special stop out of my way since I needed to deposit it in my credit union so it really inconvenienced me. No taking into account that my Dad had been a long time customer & this was a continuation of his trust accounts.

Fortunately we have been able to finally close out the trusts & close those accounts so I don't have to deal w Chase anymore!

ann
August 13, 2012 at 2:01 pm

In response to Dean's comment...the exact same thing happened to us. We originally had Chase many years ago and was happy to be out of there when we had refinances with another bank. Another bank bought the mortgage. We too had Washington Mutual, and then wound up back at Chase. After numerous attempts over 3 years to remod our loans, with sending documents after documents and reapplying, we gave up and are doing a short sale. The time and aggravation was just not worth it. You are correct, each department and branch has no clue what the other is doing, and even the "help" line would call us needing information that was already sent 10 times.

Mustapha
August 13, 2012 at 8:43 am

I have to agree with the authors, ATM's will eventually go the way of the buggy whip. I have boxes of checks I will never use and I hardly ever use an ATM now. I pay 99% of all my bills online and unless I need a "crisp bill" for a card or something now, I virtually never visit a branch. I put all my expenses on one credit card so I get the travel miles and pay that bill online too. Electronic banking is the way to go - no checks, no envelopes, no stamps, no trips to the post office - no wonder the USPS is going bankrupt.

Dean
August 12, 2012 at 5:01 pm

I have a mortgage with Chase not by my chose only because of them taking over the loan from Washington Mutual.Anyway I got a couple of months behind on my payment because of of a bad economy and lack of business for my small business.I have been trying to get the payments caught up.So Chase pushed me into setting up a repayment program with them. What a mistake that has been they have been sending me letters threating with Acceleration Warning with intent to Foreclose if I don't get my payment caught up in 30days.I tell them I am in there program they tell me that is a different department. The people in the program says that is the collection department we don't work together. Your from the same company why don't you work together.Different departments they both tell me so now I don't no who to believe.The repayment program takes 60 to 90 days to set up and the Foreclosure department is claiming they will start the process in 30 days if my payment is not caught up.I am not impressed with how Chase has handle this so far and I don't want to loss my house I now feel like I made a mistake signing up with there repayment program.I don't think the government intended the program to be handled the way Chase is handling it.I am really unhappy with Chase I think they will turn it into a bigger mess then what it is now.Chase is not your friend I would not do business with them if you have a chose.

MGACORP
August 11, 2012 at 7:12 pm

If they start charging, I'm going to start pulling.

Richard
August 11, 2012 at 7:00 pm

Been with Chase since 1982 (30 years) Never a poblem. However, do not go to them for loans. Use their ATM a lot. Never a problem.