Gary Coltin – Program ‘highly beneficial’
Since its inception a few years ago, the surcharge-free SUM network has proven to be a success, according to most participating financial institutions in New England. Now, consumers in Connecticut whose bank or credit union is part of the surcharge-free network are seeing SUM’s reach expand.
According to Will Peirce, vice president of network services for the NYCE network, which administers the SUM program, an agreement has been reached between NYCE and the Publix Supermarket chain, which has almost 900 locations, approximately 700 of which are in Florida. The ATMs in the supermarket chain, called Presto!, currently charge a $1 surcharge, Peirce said. NYCE has a relationship with the chain and signed an agreement in July to allow SUM bank customers – if their bank signs up for the service – to use the ATMs without being surcharged. The benefit is also available to any bank in the NYCE network, Peirce said.
“That’s a great benefit for the customers out there, not to mention the [financial institutions in the SUM network],” said Tom Mongellow, vice president and treasurer of the Connecticut Bankers Association. “Not a bad thing.”
Kevin Kiley, chief operating officer and executive vice president of legislative and regulatory policy for the Massachusetts Bankers Association, agreed.
“It is a tremendous boost to the industry and [SUM] participants,” he said.
The initiative is currently in effect and NYCE member banks can sign up with their NYCE representative to allow for surcharge-free use of Presto! machines.
Participating in the service involves a $250 sign-up fee, then $50 a month for banks in the SUM networks. Banks in the NYCE network, but not in the SUM network, pay $75 a month, Peirce said.
MBA and NYCE unveiled the initiative to bankers last week during an industry meeting designed to discuss the future direction of the SUM program.
NYCE is one of the leading electronic funds transfer companies in the United States, with 2,200 financial institution participants and 55 million cardholders who have access to more than 120,000 ATMs in the NYCE network.
The Publix Supermarket Presto! ATMs are not truly part of the SUM network, which is designed for financial institutions only. But in exchange for not surcharging SUM customers, the supermarket will not be charged a fee from NYCE for gaining access to a customer’s checking account when that customer uses his or her debit card to purchase items at the supermarket.
Banks charge large supermarket chains about 17 cents when a customer uses a debit card.
Kiley said the additional ATMs in Florida will benefit the many consumers who leave New England and head south for the winter months.
But after several SUM ATMs in the northeast suburbs of Hartford were gobbled up during the merger of Tolland Bank and the Savings Bank of Manchester into NewAlliance Bank, some remaining SUM members wish the network would concentrate on putting more SUM ATMs into the area.
“We’d like to see more,” said Bill McGurk, president of Rockville Bank in South Windsor.
Tolland Bank and the Savings Bank of Manchester were Rockville Bank’s main competitors before the merger, but their ATMs also strengthened the SUM network, McGurk said.
“We kind of felt comfortable with ATM accessibility,” he said.
Rockville Bank hasn’t received any complaints about the lower number of SUM ATMs, but McGurk would like the network to have more of a presence in the area.
But having SUM ATMs in Florida could help Connecticut banks’ customers, McGurk said.
“I think it’s a nice thing they’re doing,” he said.
The SUM network was introduced in October 1998 after smaller institutions became concerned about larger institutions surcharging their customers for ATM use. The Massachusetts Bankers Association created SUM as a way to provide more options to consumers and bankers. Shortly after the network was put in place, the Connecticut Bankers Association began working with small banks to introduce it there. The network is a selective surcharge program offered and administered by the NYCE network. According to the SUM Web site, cardholders of financial institutions that have chosen to join SUM can make withdrawals at ATMs owned by other SUM program member financial institutions without paying a surcharge.
According to a SUM program participant summary conducted in late October, 85 banks in Connecticut use the network and have 366 available ATMs. In Massachusetts, 328 banks are part of the program, with a total of 1,770 SUM ATMs in the network.
Bankers in New England said the SUM network has been successful and customers are receptive to the program.
“We think it has helped,” said Susan Presutti, marketing coordinator at Simsbury Bank & Trust in Simsbury. “We do think it’s an advantage.”
The bank joined the network about four years ago, Presutti said. Although it’s hard to say if the bank’s participation in the program has helped grow its customer base, some customers do feel an increased level of comfort knowing they have access to many fee-free ATMs, she said.
“The program has worked, and worked well,” James C. Lively, president and chief executive officer at Bridgewater Savings Bank in Massachusetts.
Lively said it has kept community banks competitive with their larger counterparts.
“We can network together as a group,” Lively said.
Kiley said the program has allowed community banks to compete with institutions that have widespread ATM networks.
“It moderated industry and consumer concern,” said Kiley.
Gary Coltin, senior vice president of retail banking at Eastern Bank in Lynn, Mass., said the network has allowed community banks to give their customers more ATM options.
“The vast majority of institutions don’t have an expansive reach of ATMs,” Coltin said.
Simsbury Bank & Trust has three ATMs, Presutti said. All are in the SUM network.
Bridgewater Savings Bank has a total of eight ATMs, five of which are in the SUM network. Lively explained that the three machines not in the program are in non-bank locations. As a result, the bank incurs costs for security and rent payments to the landowner and therefore charges a fee for use of the off-site ATMs.
“It is a balance you have to strike,” Lively said.
Lively said he supports the initiative to partner with Publix Supermarkets in the South.
“People [going] out of state are concerned about paying fees,” said Lively.
Selling Point
Some of the community banks have used SUM as a marketing tool to lure consumers to their bank. Gerard Lavoie, executive vice president of Dedham Institution for Savings in Massachusetts, said the SUM program has been “extremely beneficial” to the bank. He said the institution does use the network as a selling point to customers.
“When surcharging became a popular thing for banks to do, we were concerned,” Lavoie said.
Dedham Institution for Savings has a total of 10 ATMs, all in the SUM network.
“I don’t know what we would do without it,” Lavoie said.
According to Coltin, the SUM program also has worked well for Eastern Bank.
“It has been highly beneficial for Eastern Bank to participate in the SUM program,” Coltin said.
Eastern Bank has a total of 62 ATMs with all but two machines in the network.
Citizens Bank is also a participant in the SUM program and touts the largest number of SUM ATMs in the network. According to Melodie Jackson, spokeswoman for Citizens Bank, the institution offers 250 ATMs with the SUM logo.
“We are the leading provider,” said Jackson.
Jackson said the bank has not used SUM as a marketing tool, the way that many smaller banks have done, because the institution has so many of its own ATMs in the area.
Kiley said banks are not required to have all of their ATMs in the SUM network. A bank with 100 ATMs may only have 40 percent of the machines in the program, he explained.
“It is up to the individual bank,” Kiley said.
Kiley said not requiring banks to include all their machines is intended to provide the larger banks with some flexibility for their participation since they incur more costs for their locations.
A “vast majority” of banks in the program contribute most, if not all, of their ATMs to the program, Kiley said.
The cost to banks participating in the SUM program is “nominal,” Kiley said. The institutions pay a small charge to NYCE, as well as an annual advertising fee.
According to the MBA, the SUM program has been advertised on television in the form of an animated walking-and-talking ATM. The 30-second commercial aired on cable stations in the Bay State. Advertisements also were placed on Massachusetts-based Web sites.
Coltin said the advertisements have helped SUM and its participating banks gain visibility in recent years.
As the years pass, SUM is still gaining members. There have been 21 new participants this year. There are a total of 496 financial institutions in the SUM network nationwide.
Other New England states have joined the SUM network in recent years. New Hampshire has a total of 108 SUM ATMs, Maine and Vermont have 13 SUM machines each and Rhode Island offers 118 ATMs.
Kiley said the SUM Advisory Committee will continue to look at expanding access to the program. Coltin also has suggested that transactions should be reviewed over SUM’s lifespan to determine how much money consumers have saved from not being surcharged.
