Southland Corp. soon may install automatic teller machines in some or all of its more than 7,000 7-Eleven Stores, enabling customers to do their banking as well as their shopping at the nation's largest chain of convenience stores, sources said.
Safeway Stores, the nation's biggest grocery chain, already has automatic teller machines in 120 stores in Texas, and many other food stores and retailers are adding bank machines or exploring whether they want to combine banking and sales.
Industry observers expect installation of banking machines to be a growing trend, especially among chain stores. "Convenience stores are continually looking for a way to increase profits," said one expert.
The key to whether it becomes worthwhile for a retail store to put a teller machine on its premises is the number of financial institutions that are tied into the automated system. The MPACT network in Texas, run by Mercantile National Bank, links the banking machines of 257 different Texas banks and has 532 machines spread across the state, not only at the individual banks and Safeway, but also at airports, hospitals and even college campuses.
Customers of any of the 257 banks can use bank machines of any of the participating institutions as well as the independent MPACT machines at non-bank locations.
Crocker National Bank installed automated tellers in two of Atlantic Richfield's Arco am-pm minimarkets last April, about the same time the oil company began to require that its customers pay for gasoline and merchandise in cash. "Our commitment is to give banking customers access to cash as many places and as many hours as possible," said Betty Lattie, spokeswoman for the bank. She said the bank is looking at other locations working with Arco. There are approximately 700 Arco markets nationally.
"No bank in any region has more than 15 percent of the market," according to one bank official, who asked not to be identified. "Maybe half the bank's customers even use the machines. The chances that those customers shop at any particular store in sufficient numbers to make a machine profitable are slim. It takes sharing among all financial institutions to make off-premises machines worthwhile."
In the Washington area, for example, financial institutions are edging toward areawide sharing of teller machines. The First American banks of Washington, Maryland and Virgina--all owned by Financial General Bankshares--permit customers to use each others' machines. Riggs National Bank, Virginia National Bank and Mercantile Bank of Baltimore have announced that they will form a network of shared automatic teller machines.
American Security Bank has joined the Plus system--a nationwide network of banks--that will go into operation later this year.
But cooperation among area banks and savings and loan associations has not been wide enough to date to entice big local retailers such as Safeway and Giant Food to put banking machines in their stores.
Southland will discuss little about its plans to put bank machines in the 7,000 stores it operates or franchises in the United States and Canada. Southland operates 7-Eleven stores in the Washington area.
A company spokeswoman said the company has installed banking machines in a few of its stores as a test and is waiting to see the results. "It's not unusual to consider new products and services," said Alisa Martin. But industry sources said the company already has made the basic decision to permit automatic teller machines in its stores but has yet to decide which networks it will use.
"They'll make the decision by fall," said one industry official.