Wells Fargo Moving Into Cyberspace With Its ATMs

Wells Fargo Bank will announce plans today to hook up thousands of its automated-teller machines nationwide to the Internet, becoming the first U.S. bank to attempt to transform its ATMs from simple cash dispensers into full-fledged financial kiosks.

The move will eventually allow Wells Fargo ATM customers to get news headlines, stock quotes and conduct limited e-commerce transactions, such as buying concert tickets or applying for a credit card.

Already ATMs are used to sell postage stamps, ski- lift vouchers and prepaid phone cards. Though it may mean longer waits at the ATM, experts predict that over the next two years such services will expand to include stock trading, bill paying and surfing the Net.

The San Francisco bank plans to start by upgrading 650 ATMs in California this year--or nearly one in four of its automated teller machines. By 2001, most of the bank’s network of 6,000 ATMs will be Web-enabled.

In addition to new services, the technology will make it easier for Wells to advertise its product, potentially generating millions of dollars of new revenue.

Bank of America, American Express and E-Trade, three of the nation’s biggest ATM operators, also are working to link their machines to the Internet, though none has yet gone beyond the testing phase.

“Just about every major bank is looking at it,” said Robert Nemens, senior marketing manager for Ohio-based Diebold Inc., one of the world’s largest ATM manufacturers.

But will consumers embrace the new technology?

Some people are certain to bristle at the prospect of being stuck in an ATM line behind a fellow customer checking a stock portfolio, applying for a home-equity loan or watching a movie preview.

At one of Wells Fargo’s first Web-enabled ATMs in downtown Los Angeles last week, a customer who lingered playing with the new features received some dirty looks and audible sighs from lunchtime customers waiting to get some cash.

“I don’t like it,” grumbled a woman making a deposit, who found the new features and ads distracting. “That’s not what I’m here for.”

But others were intrigued. A student seemed captivated by the trailer for the DreamWorks’ film “Gladiator”--which Wells Fargo was able to zap to the ATM via the Internet. “Cool,” he said.

Love ‘em or hate ‘em, Web-enabled ATMs are on the way.

American Express is testing Web-enabled kiosks in New York that cater to tourists, selling tickets for Empire State Building tours or helping them find the closest Italian restaurant, said spokesman Tom Sclafani. In Dallas, American Express ATMs in 7-Eleven stores will soon allow users to buy books or other items, and then have their purchases delivered to the store.

The key, bankers and industry consultants agree, will be offering transactions that can be completed within the 30 to 45 seconds that most consumers now typically spend at an ATM.

“An ATM transaction needs to be fast and routine,” said Nemens of Diebold.

Eventually he predicts that banks will segment their ATMs into two types, located side by side. One will focus on dispensing cash, a kind of express check-out line. A second will offer expanded features, resembling the Web kiosks found in many airports and hotels.

Wells Fargo is starting slowly. At first, the only Web-linked feature will be updated news headlines running across the bottom of the screen, delivered through a partnership with MSNBC. Customers may also notice that the new machines are easier to read and that transactions are completed faster thanks to the upgraded computer screens and higher-speed microprocessors necessary for Internet access.

By next year, the bank will begin rolling out features that will enable customers to personalize their ATM experience--similar to the transactions available on its PC-based online banking. Users will even be able to customize certain functions, such as reprogramming the express-cash feature to spit out $80, rather than the standard $40.

Thanks to the Internet connection, e-commerce transactions will be easier. For example, customers might be able to select and buy two seats for the next Cher concert at Arrowhead Pond or check the availability of a movie. Tickets will print out with their ATM receipt.

Depending upon consumer acceptance, Wells Fargo may eventually offer limited Internet access and e-mail services, said Robert Alan Chlebowski, the Wells Fargo executive vice president in charge of the program.

The Web hookup will also mean more ads. When not in use, the new machines will run a constant stream of commercials. Once a card is inserted, a second ad appears. And as the machine processes a transaction, a third commercial runs.

Though Wells Fargo and a few other ATM owners had experimented with ads, the process was costly and cumbersome. Ads had to be installed at each ATM, costing as much as $200 per machine and taking several weeks. Now commercials can be downloaded for pennies via the Internet and be running in days.

That’s good news for banks, which have been losing contact--and marketing opportunities--with their customers. Many consumers today avoid branches entirely, using online banking or ATMs.

“When someone is using an ATM, you have their total attention during that five to 15 seconds,” said Gregg Rupprecht, marketing vice president at Baltimore-based ATM Advertising Inc. “Advertisers are desperate for that kind of attention.”