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ARLINGTON, Va. – The number of different approaches to the way credit unions can surcharge at their ATMs continues to grow. In Harrisburg, Pennsylvania, the board of the Pennsylvania Credit Union Association has asked staff to research the feasibility of it partnering with Allpoint, a nationwide ATM network which is surcharge-free to users, to expand its own ATM operation. PCUA already operates an ATM network under the CU$ brand. The network began with roughly 200 machines and has grown in cooperation with the state’s largest credit union, the $2.2 billion Pennsylvania State Employees Credit Union, to more than 800 according to Michael Wishnow, vice president of communications for the Association. Wishnow said that the Board asked the staff to particularly study how a partnership with Allpoint could help the Association grow the network as well as what rules changes need to be put into place for credit unions signing on to the network. Allpoint operates 25,000 ATMs nationwide which are fee-free to cardholders but for which participating institutions pay a flat monthly fee based on the size of their card base. Joining Allpoint would give CU$ cardholders fee-free access to 1,600 machines statewide. At the same time, credit unions in Pennsylvania and Ohio have been approached by PNC Bank and offered access to that institution’s network of more than 3,200 machines nationwide in a fee arrangement that is similar to Allpoint’s. Art Kremer, CEO of the $173 million Sharefax Credit Union, headquartered in Cincinnati, said that his credit union had taken PNC up on the offer after concluding that doing so would solve one of the credit union’s enduring problems. “For the longest time we believed that our ATM access was one of our competitive weaknesses,” Kremer explained. “Going with PNC gave our members access to their machines nationwide as well as more than 100 machines in our immediate area.” Kremer reported that with PNC’s machines the credit union had access to more than 130 ATMs in the Cincinnati area whereas the credit union had previously had seven. In order to get that fee-free access, Sharefax pays PNC a yearly amount based on volume. He also reported that the amount can decrease if the credit union is able to get its members to increase their ATM use to above a volume threshold. Once above the threshold, Kremer reported, Sharefax’s payment decreases. Robert Vuono, CEO of the $78 million Omega Credit Union, headquartered in Pittsburgh, said that his credit union had not yet signed on with PNC but was considering it. “PNC is huge around here,” he said. PNC did not return phone calls to ask about its ATM initiative to credit unions. Melissa Fox, a senior research analyst with Boston-based Dove Consulting said that the increasing number of different approaches to ATM surcharging represents an industry trend. “We think the steady migration away from the traditional surcharge model represents a search for other ways to make money from ATM machines,” she said, explaining deployers have been motivated to try other approaches as both home and foreign ATM transactions have declined. For its part, CO-OP Network, the nation’s largest credit union-owned ATM network with roughly 20,000 machines nationwide, said that it welcomes credit unions making decisions which seek to meet their members’ ATM needs. Jim Hanisch, executive vice president for the Ontario California-based network noted that the CO-OP had signed up 400 credit unions to its surcharge-free network last year and showed steadily increasing volumes so that the Network didn’t really consider the other ATM options to be in competition per se. He also observed that Allpoint’s individualistic approach differed from the credit union-based cooperative outlook that, he observed, had characterized CO-OP Network from the beginning. Hanisch asserted that the Allpoint model in which an institution makes a deal to serve its own members but not cooperate with others appeared to be more of a “go it alone approach” that is at odds with credit union philosophy. “If credit unions get to a point where they aren’t cooperating in the ways they have traditionally I think that would be pretty sad,” Hanisch said. But the bottom line is that ATM decisions are fundamentally more local than national, Hanisch said, observing there will likely be some credit unions which will find the deal offered by Allpoint or PNC or another deployer to better suit their local needs than with the network – at least in the short term. “We are doing what we do best,” Hanisch said, “we are signing up credit unions, expanding the network and plan to have a strong local presence everywhere, but we aren’t there yet.” -

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