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JPMorgan prepares to pull Chase ATMs from Walgreens stores

Published 10/03/2016, 07:14 PM
Updated 10/03/2016, 07:20 PM
© Reuters. Customers line up to use a JPMorgan Chase ATM inside of a Duane Reade store in New York
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By David Henry

NEW YORK (Reuters) - A decade after JPMorgan Chase & Co (N:JPM) said with great fanfare that it would make life easier for customers by putting its cash machines into Duane Reade drug stores in New York City and Walgreens stores in Florida, the big bank is retreating.

Customers who use the ATMs marked with Chase's blue octagon logo in those drug stores are beginning to be met with a message: “Soon this machine will no longer be a Chase ATM.”

The new message is the public start of a withdrawal that stems from an agreement the largest U.S. bank by assets made in April to sell 2,586 cash machines - primarily in Walgreens and Duane Reade drug stores, and other retailers - to ATM operator Cardtronics (O:CATM) for an undisclosed amount.

The exact timing depends on how quickly the machines can be converted for use under the brand name of another financial institution.

The deal includes ATMs in Walgreens in nine states in total, including stores in Arizona and the Chicago area.

Chase spokesman Mike Fusco said the bank is logging off of the ATMs because it will save money and because customers use these particular machines less.

"It really came down to simplifying the business," said Fusco. "Our customers are using those ATMs less frequently given that our ATM presence has expanded significantly over the last 11 years."

When Chase disconnects, it will have about 15,500 ATMs, primarily in its branches. That is more than twice as many as in 2005 when the bank turned to drug stores to quickly place cash dispensers.

It also has ATMs at some airports, train stations and sports arenas.

Fusco said Chase has ATMs within five minutes of the "vast majority" of discontinued machines because of expansions since it made the drug store deals. For example, in 2008, two years after turning to Walgreens for more Florida locations, JPMorgan picked up 260 branches in its financial crisis purchase of Washington Mutual.

Chase ATMs in branches accept deposits while the store machines it is giving up only dispense cash and show account balances.

Cardtronics is talking to other financial institutions about putting their brands on the machines and it expects to announce new arrangements "later this year," Cardtronics spokesman Nick Pappathopoulos said in an email.

© Reuters. Customers line up to use a JPMorgan Chase ATM inside of a Duane Reade store in New York

A spokeswoman for Walgreens Boots Alliance Inc, (O:WBA) which owns Walgreens and Duane Reade, had no immediate comment.

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