ARLINGTON, Va. — Tailoring ATM strategies to meet credit unions' own unique membership needs was a trend that continued in 2007, as three nationwide networks began to offer surcharge-free ATM access to participating credit union members.
Two of the three, CO-OP Financial Services' CO-OP Network and Credit Union 24, are long established. Until late in the year, CO-OP Network had been the leader in the number of surcharge-free ATMs with more than 25,000 machines. But an agreement between Credit Union 24, with 15,000 surcharge-free ATMs, and Allpoint — the newest nationwide surcharge free ATM network — hiked the number of surcharge-free ATMs available to Credit Union 24 members to more than 45,000.
This gave Credit Union 24 the largest network of surcharge-free ATMs, even if those ATMs are not all owned by credit unions and even though critics have suggested that they are not really free.
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For the first year, Credit Union 24 has arranged to subsidize member credit unions' access to the increased number of surcharge-free ATMs through a specially designated surcharge-free program. Once the first year is over, Credit Union 24 has said it will determine on what grounds and at what costs the program will continue. Should it continue, industry sources speculated that participating CUs may have to start paying a fee for their members' use of the ATMs though the machines will remain surcharge-free to the individual members.
For its part, CO-OP Network also announced a further expansion of its own surcharge-free access by more than 300 machines situated at Costco Wholesale warehouses. CO-OP Financial Services has also said that it expects the network to be able to offer deposit-taking abilities at 2,000 of the machines that Cardtronic's administers at 7-Eleven stores in the first quarter of 2008. This will move the number of CO-OP Network's surcharge free, deposit-taking ATMs to 8,500 nationwide.
Industry sources pointed out that beyond the details of which credit union ATM network leads in what, credit unions themselves are the beneficiaries of a new wave of surcharge-free ATM access.
"Now it's possible for a $45 million asset credit union to offer more surcharge free ATMs in more places than Bank of America, Chase or any of the big boys," commented one executive who declined to speak for the record. "That is a very important difference."
ATM industry analysts say that the increased number of options and opportunities will merely help continue the push among CUs to tailor their ATM programs to their individual membership needs. Now it is possible for credit unions to participate in five or more networks–some surcharge-free and some not, some accepting deposits and some not, some available overseas and others not.
It's also possible for a smaller credit union whose members primarily need local ATM access to participate only in a local ATM network on a variety of different terms. Sometimes, for example, a credit union might wish to adopt a network approach, relying less on ATMs and more on members getting cash at retail point-of-sale terminals.
The key word now is flexibility: what network or networks can offer the access credit unions need, and at what cost, said one industry analyst.
The part of the ATM industry which has changed only slowly or not at all this year has been in the technology of the machines and the networks themselves. CO-OP Network reported for the first time this year that it has set up the ability for credit unions beta testing the technology to scan deposits electronically at the ATM and then move the image entirely electronically through the resolution process.
The analogy that CO-OP Financial Services Senior Vice President Jim Hanisch has used is of a highway system. Gradually this year the linkages which enable electronic deposit acceptance have been steadily improving locally, but the superhighways needed to move volumes of images nationwide are still being built.
Interestingly, ATM services themselves have not changed much, if at all, this year. In Europe and elsewhere many consumers are open to handling a wide range of transactions at their ATMs, such as paying bills, issuing checks and making travel reservations, Americans still look to their ATMs primarily to issue cash. That did not change in 2007 and seems unlikely to do so in 2008 as well.
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