Automated teller machines are reaching deeper into your neighborhood, offering a range of services, including some that are unprecedented in Japan.

A customer uses an ATM at a Seven-Eleven convenience store in Tokyo’s Chiyoda Ward.

No longer restricted to banks, more and more convenience stores are now providing ATM services.

Convenience store ATMs — some operated by banks and others by a consortium of convenience store chains — basically allow clients to deposit, withdraw and send money to and from their bank accounts 24 hours a day throughout the year.

Banks, for their part, have been trying to enhance their own ATM functions by offering services such as allowing clients to purchase lottery tickets through ATMs.

In addition, newly emerging Internet banks are promoting ATMs as a key link with their customers.

For consumers, this spells a greater variety of services and greater convenience, while service providers see it as necessary to retain or attract new customers amid intensifying competition.

Three major camps are emerging in the installation of ATMs at convenience stores — Sumitomo Mitsui Banking Corp. together with am/pm Japan Co.; IY Bank; and E-net Japan Co., a firm jointly established by nine convenience store chains and 44 banks, insurers and other financial institutions.

Sumitomo Mitsui has thus far set up ATMs at 1,097 of am/pm’s 1,280 stores in the metropolitan area.

E-net Japan has installed ATMs at some 2,000 convenience stores, including FamilyMart Co., Circle K Japan Co. and Ministop Co. — all firms that participated in its establishment. The company aims to bring the number to 5,000 by the end of March.

IY Bank — a branch-free bank created by major retailer Ito-Yokado Co. and its convenience store subsidiary Seven-Eleven Japan Co. — joined the race in May, launching 64 ATMs at 58 Ito-Yokado and Seven-Eleven outlets. By spring, Seven-Eleven alone will have ATMs installed at 3,650 of its 8,700 outlets.

And these three players will soon be challenged by Lawson Inc., which has more than 7,500 outlets nationwide. Lawson ATM Networks Co. — a joint venture established by Lawson, Mitsubishi Corp. and Japan’s four major banking groups — will start ATM operations in autumn with the aim of installing them at 3,000 Lawson stores in the first year.

Convenience store chains hope ATMs will attract more customers and help boost sales.

Like many other retailers, convenience stores are suffering stagnant consumption and declining prices. Sales at Japan’s 14 convenience store chains continued to fall for 10 months through May on a year-on-year basis, according to the Japan Franchise Association.

“We estimate that each ATM will increase our sales by an average 10,000 yen per store per day,” Lawson President Kenji Fujiwara told a news conference in April.

The Ito-Yokado group, however, has a different strategy; its goal is to secure a competitive edge in the banking industry, a goal facilitated by its lack of overhead, including branches, and subsequent lack of administrative costs.

“We offer a 0.05 percent annual deposit interest rate, which is higher than the 0.02 percent provided by most city banks,” said Mayumi Ito, spokeswoman for IY Bank. “This contrasts with other convenience store ATMs, which only provide affiliate banks’ services.”

Elsewhere, however, it is hard to see who is competing against whom because of crossing tieup relations.

Sony Bank, a net banking subsidiary of electronics giant Sony Corp., started operations in June by offering access to 7,600 ATMs at SMBC branches and am/pm outlets. SMBC holds a 16 percent stake in Sony Bank.

Japan Net Bank, another Web bank that was set up in October with access to am/pm ATMs, has recently tied up with the E-net group, bringing its number of accessible ATMs to nearly 9,000.

Some commercial banks are meanwhile adding more functions to their own ATMs in a bid to differentiate their services.

Starting in March, Fuji Bank made lottery tickets available at its 3,000 ATMs, including Loto 6, Mini Loto, Numbers 3 and Numbers 4. Ticket holders do not need to check their numbers and winnings are automatically deposited into their accounts.

The service attracts some 15,000 customers daily with 30 million yen in daily sales, bringing a new source of revenue — commissions from ticket issuers — for the bank, according to Fuji Bank spokesman Yasushi Miyama.

Some regional banks, including Shikoku Bank and Gifu-based Ogaki Kyoritsu Bank, introduced similar services in May.

But a number of problems need to be overcome if banks and convenience store chains want to further promote the use of ATMs, said Yasuo Goto, a banking sector analyst at Mitsubishi Research Institute.

“Thanks to convenience store banking, ATMs have become more usable,” he said. “But transaction fees charged for using ATMs remain a hurdle when the current meager deposit interest rates are taken into account.”

Indeed, a survey conducted in December by the Japanese Bankers Association found that 43.1 percent of those polled were dissatisfied with bank fees.

Another 22.5 percent said the fees for after-hours use — typically 105 yen per withdraw after 6 p.m. and even more for late-night services — are too high.

Users of convenience store ATMs are also subjected to extra fees, which for now at least are generally discounted amid the ongoing campaign to promote their use. Most of these campaigns will end by autumn, however.

“ATM transaction fees are a major source of income for operators, part of which is used for ensuring the security of ATM outlets as well as for maintenance,” Goto said. “But I wonder how long this rationale can hold amid the current customer dissatisfaction with fees.”

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