Wells’s New Imaging ATMs May Signal More to Come for the Technology

Banks' efforts to rid ATM deposits of pesky?and costly?envelopes took a step forward on Tuesday with Wells Fargo & Co.'s announcement that it plans to add 825 new machines by year's end that will accept deposits without envelopes. Wells will deploy some 150 of the new ATMs, which allow customers to feed checks straight into the machine to have them scanned and imaged, in 11 central California counties by March, with the rest following over the balance of the year in San Francisco and other parts of Northern California. The deployments come on top of 400 envelope-free ATMs the San Francisco-based banking company has already installed in Northern California. Banks hope the new technology, by making deposits easier, will encourage customers to make more deposits at ATMs rather than at teller windows. Deposits currently account for only about 10% of all transactions at on-premise machines. Imaging ATMs, which can transmit check images to banks for processing, may also reduce ATM-based deposit costs for banks. Each envelope deposit at an ATM costs banks about $1.70, compared to 40 cents for a deposit without an envelope, according to researcher TowerGroup, Waltham, Mass. Much of the cost difference stems from the need to employ couriers to retrieve envelope deposits. But the costs of the technology have slowed deployments. An image-enabled machine costs about $30,000, compared to anywhere from $15,000 to $20,000 for a conventional machine that takes envelope deposits. Still, there are signs of increasing interest in the technology among major bank deployers. In addition to Wells, which has been testing imaging ATMs for five years, Bank of America Corp. now has more than 800 of its 16,700 ATMs converted to imaging. BofA in 2003 started testing the machines in the area of Charlotte, N.C., where it is based. Wells's overall ATM fleet totals more than 6,700 machines. A survey conducted last year by Dove Consulting, Boston, showed that 21% of large banks and 24% of big credit unions had deployed image-capable ATMs, with 58% of banks and 65% of credit unions planning to deploy the machines within a year. Wells's envelope-less machines can accept up to 30 bills and as many as 10 checks at a time. The ATMs image the checks, display the images on the screen, and print out receipts. The machines transmit the images to the bank, which grants same-day account credit to the depositor. Imaging ATMs take advantage of technology encouraged the Check Clearing Act for the 21st Century (Check 21), a 2004 law that has fostered image exchange among banks and remote capture of electronic check images.