More and more banks are entering arrangements with railways to set up automated teller machines in stations.

Railway and bank officials said Wednesday that with the spread of prepaid tickets and mobile phones, banks have installed ATMs in locations once occupied by ticket vending machines and pay phones.

Railway firms are benefiting from fresh tenant fees in exchange for authorizing ATM installations, while banks are pocketing more ATM commissions.

Bank of Ikeda and Hankyu Corp. were the first to conclude this type of arrangement. In June 2000, the pair, both based in Osaka Prefecture, set up a joint venture, Station Network (STN) Kansai, to promote ATMs in stations run by Hankyu.

The venture has so far installed 72 ATMs in 43 stations.

More than half the people who use ATMs in these stations hold cash cards issued by banks other than Bank of Ikeda. An STN Kansai official said, "Younger generations tend to use station ATMs even if it entails paying a fee."

In the Tokyo metropolitan area, Shinsei Bank and its partner, Keihin Electric Express Railway Co., have set up ATMs in 27 stations.

The railway is waging a public relations campaign by waiving ATM fees altogether.

Bank of Yokohama established a tieup with Odakyu Electric Railway Co. The bank plans to install ATMs in all Odakyu stations by around March 2005.

The pair say they envision expediting ATM installations to provide residents in the vicinity of stations with an improved platform of services.