Big bank JPMorgan Chase (NYSE: JPM) is, uncharacteristically, reducing its presence in a classic segment of its business. It has begun un-branding thousands of ATMs in key retail locations across the U.S., mainly in the Walgreens and Duane Reade drugstores operated by Walgreens Boots Alliance (NASDAQ: WBA).
The process is the final stage of a deal JPMorgan Chase made with ATM operator Cardtronics (NASDAQ: CATM) this past April. The two agreed that Cardtronics would take over 2,586 Chase Bank machines. Neither the terms nor the price of the deal was disclosed.
In addition to those in Walgreens and Duane Reade outlets, the ATMs in question are located "primarily in high-traffic retailers" such as convenience store chain ampm, according to Cardtronics. Several are positioned in airports. All told, the machines are located in nine states.
In 2005, the bank struck a deal with Duane Reade, then a private company, to place ATMs in each of its 216 New York City stores. Then as now, the chain's outlets were general placed in convenient locations throughout the city, and quite popular with New Yorkers.
Abandoning the 2,586 ATMs won't lead to a great deal of inconvenience for Chase customers, however -- afterwards, the bank will still operate over 16,000 of the machines. That's more than twice the number it boasted in 2005. Besides, the retailer-sited ATMs can only dispense cash and display account balances; standard JPMorgan Chase ATMs these days also accept deposits.
A Reuters article on the subject quoted JPMorgan Chase spokesman Mike Fusco as saying that his company's "customers are using those [sold] ATMs less frequently given that our ATM presence has expanded significantly over the last 11 years."
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Eric Volkman has no position in any stocks mentioned.