Sparked by globalization and the worldwide recession that has led to belt-tightening, foreign banks are providing new business opportunities for two of the nation's largest surcharge-free ATM networks, Allpoint and MoneyPass.
Foreign financial institutions are joining the networks so they can offer customers broader access to surcharge-free ATMs when they move to the U.S. to live temporarily or when visiting on business or while on vacation.
Allpoint, which operates a network of 37,500 ATMs in the U.S. and United Kingdom, announced recently that ICICI Bank Ltd., India's second-largest bank based on assets, joined the network after opening a branch in New York City.
"ICICI Bank has launched the Global Indian Account facility, the first of its kind in India, which addresses the banking needs of Indians moving overseas by giving them access to financial services from the time they enter the United States," G.V.S. Ramesh, head of ICICI's New York branch, said in a statement. "Allpoint enables our Global Indian Account customers to have access to over 35,000 surcharge-free ATMs coast to coast and over 2,000 across the UK."
Cardtronics Inc., the world's largest ATM ISO based on machines owned and managed, owns Allpoint, which is based in Bethesda, Md.
MoneyPass, which operates a network of 17,000 ATMs, says Total Bank, which is owned by Grupo Banco Popular Espanol, Spain's third-largest bank group based on assets, joined the network so it could provide customers free ATM access nationwide. Total, which is based in Miami, operates 12 branches in the Miami area, according to Douglas P. Miraglia, MoneyPass Network president.
The signing of the agreements with foreign banks has prompted Allpoint and MoneyPass executives to pursue similar deals with more foreign financial institutions that either have opened branches in the U.S. or that send executives to the States on business.
"We are in discussions with banks based in Asia, Europe and Canada, and we expect to announce something in six months," says Ben Psillas, Allpoint president.
MoneyPass is involved in "ongoing discussions with banks in Canada, Mexico, Asia and England," Miraglia says, declining to discuss specifics about what the agreements might entail.
U.S. Bancorp owns MoneyPass, which is based in Minneapolis, and its U.S. Bancorp International unit periodically has asked to MoneyPass to participate in discussions with foreign banks, Miraglia says, noting his surprise that foreign banks would want to join U.S.-based surcharge-free ATM networks. He thought of surcharge-free ATM networks as serving only U.S. banks and U.S. residents.
Pursuing business with international financial institutions is good both for surcharge-free ATM networks and the banks, says Kate Monahan, an ATM analyst with Aite Group LLC in Boston. Access to surcharge-free ATM networks keeps expenses down for executives traveling to U.S. on business, she says.
"Many banks no longer allow executives to travel because of the global financial crisis, and when they do their budgets are much tighter," Monahan says.
Surcharge-free ATM networks enable foreign banks that open a U.S. branch to offer nationwide access without the financial institution spending millions constructing branches to serve customers, Monahan says.
Moreover, surcharge-free ATM networks can serve temporary workers who move to the U.S. to work but who want to keep open their accounts with the banks in their native countries.
Temporary workers who do not have surcharge-free ATM access through their home banks are more likely to close accounts with banks in their native countries and open new ones with banks, she adds.
"Customer acquisition is on everyone's mind, and surcharge-free ATM networks enable foreign banks to keep their customers," Monahan says. "The cost of joining a surcharge-free ATM network is minor compared to the aggregate deposits a bank would lose if customers do not have ready access to their money. If the networks have a good penetration with U.S. banks, the networks should expand beyond them."
In the past few years, a number of foreign banks, including HSBC and Banco Santander, have opened branches here," she says. Banco Santander is based in Madrid, and HSBC is based in London. ATM