If travelers are in need of cash in London or Tokyo and carry a Visa card, they soon may be able to go to an automatic teller machine in either of those cities and use their Visa card to get cash--pounds or yen.
The funds will be drawn on a traveler's regular U.S. bank account in an instant, converted from pounds or yen to dollars at the wholesale rate at which banks exchange currencies among themselves. A London traveler will be able to do the same in the United States or in Tokyo.
So far only 20 banks, all of them in the United States, have agreed to join the so-called Visa global payments system. But Visa, the international bank credit card association, said it expects to begin signing up foreign banks soon and that more U.S. banks will join the system before its anticipated July 1 start-up date in the United States.
Last week, Visa formally announced its long-awaited entry into the world of electronic banking. On July 1, it said, it expects to have several hundred automatic teller machines in the system and by mid-1984 it hopes to have 1,000 robot tellers, including 200 at key airports and train stations in 15 countries.
Among the 20 U.S. institutions that have agreed to join the shared-teller-machine system are Suburban Bank in Bethesda and Citicorp, parent company of the nation's largest financial institution, Citibank.
But the 500 automatic teller machines that Citibank runs in the New York City area will not be part of the Visa system, at least initially. Citicard machines use lasers to read information on the customer's bank card, while most other automatic teller machines in this country read information from magnetic tape on the back of the card.
The bank card association said a key element of the U.S. shared-teller-machine network will be the placement of machines in 35 important travel locations. The association has targeted National Airport, Baltimore-Washington International Airport and Union Station here, as well as other transportation hubs such as Chicago's O'Hare International Airport and New York's LaGuardia and Kennedy.
Visa also wants to put machines in resort locations such as Disneyland and Knott's Berry Farm, tourist attraction's such as the San Diego Zoo and Chicago's Lincoln Park Zoo and such gambling spas as Las Vegas, Lake Tahoe and Atlantic City.
Visa comes late to electronic banking. There are already three nationwide teller networks in operation. Dozens of banks have experimented with home banking and point-of-sale terminals that permit immediate transfer of funds from a purchaser's bank account to a retailer's account--experiments that Visa expects to begin soon.
But Visa, which has long said it plans to enter the electronic payments market, has 2,000 member banks worldwide and thousands of merchants that accept either Visa credit cards or debit cards. Along with its chief competitor, MasterCard, Visa is in a position to quickly forge networks that other systems have had to put together bank by bank and merchant by merchant. MasterCard, too, has said that it plans to create its own electronic banking network.
Even banks that already are members of nationwide shared-teller-machine networks say they may join the Visa network as well. Another 120 banks will meet with Visa officials this week to discuss the possibility, a spokesman said.
American Security Bank, a charter member of the Plus nationwide system, believes customers eventually will be able to get access to their account from any teller machine in the nation, a spokesman said. American Security officials will meet with Visa officials Tuesday to discuss the new system.
Frank Rauscher, executive vice president for retail banking at Suburban Bank, said the Visa network is "the next logical evolutionary step" in electronic banking. He said Visa is the "most proven, most reliable" international payments system today--its credit cards and debit cards are accepted worldwide.
Suburban Bank customers will be able to use their credit cards at participating teller machines to get cash advances or use their debit cards to get funds directly from their bank account.
Visa said that beginning July 1, member banks may begin issuing so-called "Electron" Visa cards that will carry a customer's account information in three different ways: encoded on the standard magnetic tape strip, on a special strip that can be read by an optical scanner and in a bar code similar to those used on grocery products.
The Electron card will be used only as an electronic card rather than a standard credit card, at least at first, because it cannot be embossed with the card owner's credit card number and name. A Visa spokesman said the organization hopes to develop technology within a year or so that permits it to put raised lettering on the front of the card without indenting " the reverse.
To finance its ambitious plan--which also includes updating its current electronic communications and authorization system to handle the expected increase in volume--Visa later this year will assess its 2,000 member banks a total of $40 million, whether or not those banks choose to join either the shared-teller-machine network or the other experiments in home banking or electronic point-of-sale.
Visa said its members will have the option of buying 10 percent bonds issued by Visa or contributing 90 cents for each $1,000 of card volume they generate for a year.