Tight budgets are keeping most banks from buying envelope-free ATMs, which can cost as much $35,000 each, suggest the results of a recent survey of 23 of the 80 largest U.S. banks based on ATM-network size. Envelope-free ATMs enable bank customers to deposit checks and cash without the need to use a sealed bank-deposit envelope. Boston-based consultancy Aite Group LLC, which conducted the survey, would not disclose the polled banks' names. However, Kate Monahan, an Aite analyst and author of the 39-page report "U.S. Bank ATMs: Rebuilding the Foundation," says the survey involved at least one of the three largest ATM networks. Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., all of which are buying envelope-free ATMs, own the three largest bank-ATM networks. Of the 23 banks surveyed, only 12% of their total ATMs accepted envelope-free deposits at the end of 2008, Monahan says. Aite Group's study found, however, that envelope–free ATMs could grow to become 14% of total ATM deployments by the end of the year. Next year, sales of envelope-free ATMs could grow by 26% because bank executives expect to have more freedom to spend money on ATMs, and many banks will have to replace their aging machines, Monahan says. And more banks likely will buy envelope-free bulk-cash and bulk-check ATMs that can accept more than one check note at one time, she says.

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