A major effort began last week to link all automatic teller machine (ATM) networks in the region to a universal electronic payments system providing access to customers of all area retail outlets and financial institutions.

But that goal appears to be a mere pipe dream for now, as competition continues to get in the way of cooperation.

Little or no progress toward a universal system is likely to be made, in fact, unless market forces resolve the dichotomy that has split the area's ATM groups along philosophical and competitive lines.

In the long run, consumers may pay the price for this schism even though officials on both sides of the issue agree that electronic payments systems tying banks to retail outlets are inevitable extensions of the technology that led to basic remote banking machines.

Although representatives of four ATM networks agreed at a meeting last week that consumers should have universal access to point-of-sale (POS) facilities, the concept is vigorously opposed by members of Network Exchange, a consortium of 22 banks and savings and loan associations.

The objective of linking retail outlets and financial institutions to POS systems is not in dispute, agrees Phillip Parker, president of Shared Electronic Systems Inc., parent of Network Exchange.

Nonetheless, Parker says, the board of Network Exchange thinks it can accomplish more by working directly with retailers in establishing electronic payments systems.

Thus Network Exchange has ruled out participation in an ad hoc organization called the Mid-Atlantic Task Force on Retail Financial Systems. And representatives of Network Exchange were conspicuously absent from the first significant meeting of the task force last week.

Parker says Network Exchange wasn't invited because it doesn't support the task force's goal.

Attending the task force meeting were representatives from Money Exchange, EFT Group, Cash Flow and the Tri-State Credit Cooperative. Like Network Exchange, all are ATM networks that have been formed within the past year. (Network Exchange was the first to become operational.)

Other participants in the task force meeting included representatives from merchant and trade groups based in the area.

Although the meeting had been scheduled some time ago, recent announcements by the area's major food chains apparently underscored the need to accelerate efforts to foster discussion among ATM networks.

Despite widespread reluctance by major retailers to align with individual ATM groups, Safeway Stores Inc. earlier this month announced an agreement with Network Exchange to install ATMs in most of the chain's Washington-area stores.

And on the heels of that announcement, Giant disclosed that it will develop its own ATM and POS system that would accommodate all its customers, regardless of where they bank.

"I think that those moves stimulated more interest" in the task force, said one of its organizers.

Undaunted, Parker immediately called Giant to declare that Network Exchange is "ready to sit down and talk" about a cooperative arrangement.

But Network Exchange continues to draw the line on suggestions that it discuss how the various networks can interact.

"That doesn't mean a single ATM network, although eventually they merge," said a bank executive who attended the meeting of the task force. "What the retailers are saying is that it doesn't do them any good to have POS terminals if the switches computer driven mechanisms that route electronic banking transactions between institutions aren't talking to each other."

But Parker maintains, "I don't think one day we are going to have a homogenous thing. I think we can make it work as competing entities."

Parker cites competition between VISA and Mastercard as an analagous stituation. Both bank card organizations are fierce competitors but merchants accept both for payment, he noted.

"Competition is good," says Parker. "I think it's good to have two competing groups."

Understandably, "When you start with ATMs there is a lot of competing and vying for position," observed a member of the task force of retail and financial systems.

But electronic payments systems won't be confined to banking. Their development eventually will affect the way most major businesses collect payments.

In fact, members of the task force that met last week include the Postal Service, which is studying the feasibility of developing a POS system to handle various retail transactions.

And in a related development, the Agriculture Department has authorized development of a pilot POS system in which debit cards would be used to pay for food stamp purchases.

With developments such as those under way, ATM networks eventually will be forced to interact.