Retailers are forcing financial institutions in the area to answer some critical questions about the next phase in the explosive growth of remote banking machines.

Essentially, retailers want to know what their costs will be and how their customers will be affected by the installation of remote terminals in their stores. At some point, consumers should begin asking similar questions because, ultimately, they will share those costs.

Meanwhile, however, financial institutions that have formed shared ATM networks in the Washington region are preparing major marketing campaigns aimed at getting retailers to permit the installation of a more sophisticated type of banking terminal in their stores.

Norfolk-based Virginia National Bank plans to conduct a pilot program next year in which computer-assisted, direct-debit transactions for purchases will be performed in selected retail outlets.

Shared Electronic Systems Inc., sponsor of Network Exchange, a regional automatic teller machine system, said in an announcement this week that a major part of its marketing program will be aimed at the retail sector.

SES, which is the umbrella for a consortium of 16 financial institutions in the Washington region, has just signed a long-term agreement with Electronic Banking Systems (EBS) of Dallas, which will direct its marketing services. EBS helped establish MPACT, the big Texas ATM network that won approval to put its terminals in Safeway stores across the state.

"We plan to make Network Exchange the premier electronic banking system in this region," declared SES President Phillip Parker after signing the agreement with EBS. "We feel EBS can give us the boost we need."

As consultant to Shared Electronic Systems, EBS will have primary responsibility for signing up additional financial institutions as members of Network Exchange. But a major part of its work will be to add more off-premises locations -- "where people work, play or shop," said Thomas R. Metz, president of EBS.

Obviously, it is more cost-effective to install terminals in locations that attract large numbers of consumers, and that's why retail stores figure so prominently in the plans of operators of shared ATM systems.

But merchants in this area, at least, have been reluctant to approve the installation of terminals in their stores. Most retailers here believe that by signing an agreement with any one ATM network they might alienate customers whose banks don't share in that system.

It should be noted, however, that cash registers in some local retail stores are linked to the Maryland Switch, a central computer that sorts interchange transactions for several banks in the region. By being linked to the switch, an electronic cash register is capable of completing customer credit card authorizations for purchases almost instantaneously.

But getting merchants to move to the next step hasn't been easy, sponsors and marketers of ATM systems concede.

Retailers "see these things as very competitive so they don't want to talk about them, but we see these things as more point-of-sales (POS) terminals" rather than banking machines, said David A. O'Connor, a senior vice president at Virginia National Bank and president of Cash Flow Inc., a bank services and product development subsidiary established by Virginia National.

O'Connor admits that explaining the functions and merits of bank terminals "is not a simple proposition."

Indeed, he added, consumers will be presented with a "fairly wide spectrum of terminals," ranging from those that dispense cash to the more sophisticated point-of-sale types.

By using the latter in a retail outlet, customers may insert a plastic bank card and get a verifiction code imprinted on their checks. Or they may transfer value (funds) electronically from their banks to the retailer's bank. And at some point, they can use a POS terminal to pay bills while shopping, by transferring funds to various creditors' accounts.

The key to making this possible, O'Connor says, is to develop a comprehensive program that is acceptable to retailers and "give them what they want at a reduced cost."

But the broader issue, he added, is who ultimately pays for the convenience of handling fewer checks and less cash and paper.

Certainly financial institutions and retailers will bear the costs of installation and fees associated with operation of the equipment. But somewhere along the way, consumers will share those expenses and, like retailers, should start asking questions fairly soon.