The slumping U.S. economy is cutting into home, automobile, travel and retail
sales, but it is having the opposite effect on surcharge-free ATM networks. The nation's financial weakness is proving a key factor in the long-term growth of surcharge-free ATM networks that have seized the moment by successfully portraying themselves as knights coming to the rescue of financially stretched and stressed consumers.
Community banks and credit unions are joining the four largest surcharge-free ATM
networks–Allpoint, Credit Union 24, Co-op Network and MoneyPass–to help their
depositors and reduce their credit-union members' fees during these challenging economictimes.
Surcharge-free ATM networks also helpcredit unions and community banks that
individually may have a small number of ATMs become part of much larger ATM networks.
This enables them to compete on a national scale with banks that have thousands
of ATMs, Jim Gowan, executive vice president and chief operating officer of
Tallahassee, Fla.-based Credit Union 24, tells ATM&Debit News.
By joining a nationwide surcharge-freeATM network, community banks and credit
unions can include information on the networks in their sales pitches to retain
established customers and attract new ones.
For example, Chicago-based Alliant Credit Union, formerly known as United
Airlines Employees' Credit Union, recently joined Credit Union 24 after Alliant officials
learned Credit Union 24 had expanded its surcharge-free ATM network, Gowan
Alliant also is member of Co-op Network, a Credit Union 24 competitor.
Because the credit union belongs to both networks, its members have access to a
combined 75,000 surcharge-free ATMs nationwide.

Deposit-Taking ATMs
While the networks emphasize that they offer access to ATMs that provide surcharge-
free cash withdrawals, Co-op Network also stresses ATM locations where
credit-unions' members can make deposits.
"We are working to provide members with more convenience," says James A.
Hanisch, Co-op executive vice president of development. Co-op's surcharge-free ATM
network has 25,000 machines, and 9,000 accept deposits.
Community banks and credit unions pay surcharge-free ATM network operators
a monthly fee to enable their cardholders to use the machines for withdrawals and
In the last few months, surcharge-free ATM networks reported a number of
agreements, contributing to their growth.The biggest deal, so far, is the recently
announced a 2.5 year contract betweenCredit Union 24 and Allpoint, which is
based in Bethesda, Md.
The alliance creates the nation's largestsurcharge–free ATM network for credit
unions, with 50,000 machines nationwide.Credit Union 24 and Allpoint, the largest
ATM network for credit unions and banks with 32,000 machines, call their alliance
CU Here Premium.
The two companies announced a oneyear trial in December, but they ended it in
June and signed a longer agreementbecause Credit Union 24's 500 creditunion
members wanted something "more permanent," Gowan says.
MoneyPass, a surcharge-free ATM networkwith more than 13,000 machines,
also belongs to CU Here Premium.

Credit free ATM networks making deals.
Since January, 100 financial institutions have joined MoneyPass, the Minneapolisbasedsurcharge-free ATM network for
credit unions and banks, says DougMiraglia, MoneyPass president.
And earlier this month, Co-op Network, a Rancho Cucamonga, Calif.-based creditunionservice organization, announced 111 credit unions joined the network during the first half of the year.
Membership Growth
"This is tremendous growth, which also includes more than 500 new credit unionowned ATMs," Eric Porter, Co-op executive vice president of business development, said in a statement.
Consumers who are keeping a tight rein on their wallets and pocketbooks because
of the economy appear to have played a\key role in sparking the growth of surcharge-
free ATM networks, industry executives agree.
"Considering the economy and the need for American families to save money,
credit-union membership, including benefits and access that CU Here Premium
program provide, are a viable and needed alternative to other financial institutions,"
Jim Park, Credit Union 24 president and CEO, said in a statement.
MoneyPass' Miraglia agrees. "We simply find that financial institutions
are responding to their customers'demand that they get access to surchargefree
transactions," he says. "It may have something to do with the economy
because consumers seem particularly cost-conscious right now."

Surcharge Fees As A Catalyst
Banks charge nonbank customers an average surcharge fee of $1.78 per ATM
withdrawal, says Greg McBride, senior financial analyst at Bankrate.com, a consumer
Web site.
A checking account customer's own bank also–but not always–charges a foreign
fee to depositors who use a non-network bank's ATMs, McBride says.
Banks' foreign fees average $1.25 per transaction.So some consumers who do not use their own bank's ATMs for cash withdrawals pay an average of $3.03 in fees per
transaction, McBride says.
Oregon Pacific Bank, a community bank based in Florence, Ore., operates
seven ATMs. Earlier this month the bank joined the MoneyPass surcharge-free ATM
One benefit, says Jim Clark, Oregon Pacific president, is that the MoneyPass
agreement gives Oregon Pacific customers access to an ATM network much larger
than the bank's. MoneyPass appeals to "value-minded consumers," Clark says.
Also, when Oregon Pacific customers withdraw cash from a MoneyPass ATM,
they save money because they do not pay surcharges and foreign fees, Clark says.
Recent announcements by United and American airlines that they are charging
passengers flying on the least-expensive tickets an additional $15 to check luggage
has made bank customers more "fee sensitive,"says Ben Psillas, Allpoint president.
Surcharge-free ATM networks are the right product at the right time, McBride says.
"Word is getting out and consumers are looking for ways to cut costs, so surchargefree networks are well-positioned," he adds.

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