Representatives of competing automatic teller machine networks in the Washington region are battling quietly to enlist major retailers.

Although financial institutions in one ATM network say they will announce an agreement with "several" retailers next month, merchants generally are reluctant to tie into an electronic payments system that doesn't include all area banks and savings and loan associations.

This reluctance, in fact, could force financial institutions to forget their philosophical differences and form a single ATM network for the region.

Banks and S&Ls in the ATM networks plan eventually to expand financial services to include an electronic payments system. Not only would customers be able to withdraw cash and complete other banking transactions; they would pay for purchases by electronically transferring funds from their accounts to a retailer's bank.

In order to make an electronic funds transfer (EFT) link with merchants pay off, however, financial institutions need large retail outlets that generate substantial customer traffic.

Supermarkets, for example, are considered ideal locations for the point-of-sales terminals used in an EFT system.

However, Giant Food Inc., the region's largest supermarket chain, has made it clear that it doesn't plan to become involved with any of the three ATM networks that have been formed. Giant endorses the electronic-payments concept but officials of the chain adamantly oppose affiliating with a single ATM group.

By putting one ATM network's terminals in its stores, Giant runs the risk of alienating customers who bank at institutions belonging to rival networks. And given the keen competition among food chains in the Washington area, no chain wants to risk losing large numbers of customers.

Senior Vice President Donald Buchanan said that, although Giant is "very actively looking at whatever that marketplace has to offer," it's not in Giant's interest to endorse one system over another.

Similar positions adopted by other retailers have delayed the announcement and start of some ATM systems in the area. "Retailers want to see a critical mass" of institutions and ATMs, one local banking official acknowledged.

Although persons claiming to represent some ATM networks have indicated the existence of an agreement with a major supermarket chain, Safeway Stores and Giant, the market leaders, say they aren't involved.

"We have to be able to offer service to our customers to allow any customer to be able to go in our stores and use the services of any financial system of his choosing," Buchanan said.

"What we're seeing in the Washington area today is a fragmentation of that effort, and we don't think that's the right way to go."

Giant advocates a "global approach," or a single ATM network comprised of all financial institutions in the region.

With four different ATM networks involving more than 45 banks, S&Ls and credit unions, officials of those institutions obviously oppose a universal system. However, philosophical differences may yet give way to practical business sense, leading to a merger of ATM networks, two local bankers confided recently.

After all, they pointed out, preparations are being made for larger regional networks and, ultimately, a national system that will bring the so-called checkless society closer to reality.

Meanwhile, officials of two ATM networks that will be operational in this area by next year say differences among them wouldn't preclude a merger.

Until that happens, retailers such as Giant will reject all proposals to become involved with EFT systems operated by financial institutions.

"This is a very muddy, cloudy area right now, so I don't see us getting involved in a three-bank situation, or a five-bank situation," Buchanan said. "If somebody were to come in this marketplace and say 'we've got the equipment' and all these banks are signed up, we would be interested."

Giant hasn't wavered from its position since two years ago when Buchanan explained it at a banking payments systems conference sponsored by the Federal Reserve.

Buchanan said then that a debit system is preferable to ATMs that enable consumers to do a variety of banking transactions. In other words, Giant prefers a payments system that would integrate a debit-card reader into its checkout stands. The system would electronically transfer payment for purchases from a customer's bank account to a bank of Giant's choice.

"In the highly competitive industry in which we operate, we are extremely customer-sensitive, and any such system must be oriented to our customers," Buchanan emphasized.

In their present form, none of the ATM networks satisfies that requirement, prompting Buchanan to tell their representatives "to go back and get their act together."