Internet banking, money back from point of sale transactions, electronic
bill pay, atm's on every street corner represent a shift in how we
bank.  more and more, we are banking without bricks.  As the article below
from atmmarketplace.com shows, atm's are at the center of this emerging
banking universe, which is why it is so essential that we as blind people
have access to them.

kelly

   Banking without bricks


                                                                  [LINK]

   by James Bickers February 09, 2001

   Wooed by better-than-average interest rates, 24 hour convenience, and
   instant access, millions of consumers have begun taking their banking
   transactions online. The number of households who use online-only, or
   "pure play" banks (those banks which do not operate traditional
   branches), is estimated somewhere between 3 and 5 million - nearly
   twice as many as two years ago.

   Although online banking is undeniably convenient, there has been one
   major stumbling block: getting money into the account.

   "One of the Achilles heels of [internet banking] is getting funds into
   the accounts," says Ben Brake, director of marketing at Juniper
   Financial Corp., an online-only bank started by former Bank One
   executives James Stewart and Richard W. Vague.

   In most cases, customers who set up new accounts (or just want to add
   funds to an existing one) must either mail a check to the banks office
   or perform a wire transfer. Since online-only banks do not have branch
   locations, the traditional Friday-afternoon drive-thru deposit is not
   possible.

   But E*TRADE, a leading online broker which has spun off into online
   banking services through E*TRADE Bank, raised some eyebrows when it
   purchased Card Capture Services, one of the nations largest ATM ISOs.

   It does seem to be a match made in heaven: if online banks partner
   with ATM operators - or purchase and maintain ATMs themselves - they
   suddenly have a hands-on interface between their coffers and the
   consumer wanting to make a deposit. All without the expense of setting
   up branch locations.

   A Changing Business Model

   Online banks have toyed with the use of ATMs in the past, chiefly in
   the form of fee rebates. Under this model, customers use any ATM that
   they find convenient, and the online bank refunds them a certain
   number of transaction fees per month - typically, banks will offer
   rebates for up to five transactions a month, which is an effective
   credit of $7.50 per month at the usual $1.50 transaction rate. E
   *TRADE Bank, though, took the idea one step further: since the online
   bank operates the ATM, there are no fees to refund.

   According to Mitchell Caplan, chief banking officer of E*TRADE Group
   and chairman, president and CEO of E*TRADE Bank, the purchase of Card
   Capture Services was "an incredibly strategic deal if you really look
   at the behavior patterns of those banking and investing online, they
   use ATMs almost exclusively."

   Caplan points out that E*TRADE Bank is able to operate almost ten
   thousand ATMs for about the same cost of running five traditional,
   "brick and mortar" bank branches. And being able to offer ATM access
   at no charge is a powerful marketing device - "if you become an
   E*TRADE customer, you dont have to pay $1.50 anymore."

   The idea is spreading quickly. Another large online bank, Wingspan
   Bank  recently announced free ATM access for its users through any of
   the 30,000 machines operated by traditional bank Bank One. And NetB@nk
   recently inked an arrangement which offers ATM deposit access through
   the 18,000 machines of the MAC network. In both instances, the
   internet bank pays an interchange fee to the network operator.

   "I would definitely say that Ive seen an increase in interest from
   online banks, in the past 18 to 24 months," according to MAC Network
   spokesperson Melinda Mercurio.

   Then, there are instances in which pure-play banks interact with
   businesses which have established real-world presence. One good
   example of this is State Farm Insurance, which recently began offering
   banking services in several states under the name State Farm Financial
   Services. Transactions can be carried out at any State Farm agency;
   and over time, ATMs will be placed inside the agencies themselves.

   Juniper has worked out a deal with the Mail Boxes Etc. chain which
   would allow customers to make deposits at any MBE location. Deposits
   will be overnighted to the bank, and Juniper will pick up the tab for
   delivery.

   Another leading online bank, National Interbank, recently completed a
   similar deal with Mail Boxes Etc. According to National Interbank
   director of marketing Tony Plohoros, "We partnered with Mail Boxes
   Etc. because theyre a trusted name and service provider throughout the
   country. The trust is there, the reputation for quality customer
   service has always been there. And it also helps that they have more
   than 3,400 locations. So they can give us a physical deposit
   presence."

   Such arrangements, in which an online business interacts with a
   real-world business, has given rise to the term "clicks and mortar," a
   play on the phrase "bricks and mortar" which traditionally describes a
   real-world business with no online component.

   According to Brake, ATMs could become a "first line of opportunity for
   us to facilitate consumer transactions - both deposits and withdrawals
   were bullish on ATMs."

   ATMs might well become one of the most important interfaces between
   the pure-play online bank and the end user. And one thing that this
   trend spells is increased opportunities for ISOs.

   "I see it as an area of great potential," says Sam Jonas, owner of
   Denver-based Cash Resources, Inc., which operates roughly 2,000
   machines. "The online banking market is going to be under the same
   pressures that all online marketers are, and that is that they are
   going to have to have at least an element of clicks and mortar with
   what theyre doing."

   Online banks are particularly eager to build their brand recognition,
   and working through ISOs - either through co-branding of existing
   machines or by purchasing new machines outright - will most likely be
   the route taken by many of these banks.

   "Youll see a mixture of points of presentation to the public," says
   Jonas. "And I think that will work the best. Lets face it - there are
   not a whole of ways that the online banks can get big blocks of ATMs.
   Wells Fargo is not going to sell them a big block. Theres not a whole
   lot of places they can go."

   Weighing the Risks

   Despite the early optimism, online banking has not taken off as
   quickly as hoped; it certainly lags behind other online financial
   services (such as stock trading) in terms of speed of consumer
   adoption. One popular view is that this is not so much a technical or
   logistical question, as a psychological one. Everything about a
   traditional bank - the sturdy image, the architecture, the high level
   of security - implies a degree of safety. Customers, by and large,
   feel safe walking into their bank and handing their money to the
   teller. Getting those same people to feel good about sending their
   money to a company with no physical location will require a drastic
   change in consumer thinking.

   "Certainly, online banking hasnt taken off as quickly as brokerage,"
   says Plohoros. "My personal opinion is that people view their
   brokerage dollars differently than their banking dollars. Theyre a
   little more comfortable with risk; for instance, if they lose a couple
   of thousands of dollars in the stock market, while theyre
   disappointed, its more acceptable because they go into the transaction
   being comfortable with some level of risk.

   "On the banking side, when youre talking about your savings, your
   bill-paying dollars, your sustenance, its a different way that you
   look at your money. Youre certainly not going to be comfortable with
   risk. Also, the brokerage transaction - the buying and selling of
   stocks - has always been a remote transaction. So now were trying to
   change a long-standing mindset. People are used to having a
   relationship of some sort - they know their tellers, they know the
   branch on the corner. They can go touch and feel their money."

   Plohoros clearly feels, though, that it is only a matter of time
   before the pure-play bank can bring itself to an even keel with its
   traditional counterpart. He feels that the value - the higher interest
   rates and lower fees which result from reduced costs - is just too
   good to pass up in the long run. And ATMs will almost certainly play a
   large part in that evolution.

   "If you look at the value proposition [between online-only banks and
   conventional banks], there really isnt a comparison," says Plohoros.
   "So what we now need to focus on is making our service as accessible
   as possible to as many people as possible. And in some cases, thats
   going to mean a physical presence of some sort."


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