Banks are engaged in a massive sell-off of their ATM networks in a move that has raised fears there will be a hike in fees for withdrawing money from the machines.

Bank of Ireland is selling off a network of 700 ATMs, while AIB is seeking bids for 375 of its cash machines, the Irish Independent has learned.

The 1,000-plus cash machines being sold are largely based in retail outlets, and represent more than a quarter of all cash machines in the country.

There are currently around 3,000 ATMs owned by banks, and another 750 owned by independent providers.

There are worries that rural areas will be the big losers. Consumer groups say companies that own ATMs independently of banks are likely to impose charges and fees for using them.

This would be in addition to the fees imposed by banks for withdrawing cash from an ATM.

Bank of Ireland charges its customers 25c for cash withdrawals, with AIB charging 35c unless certain conditions are met to avail of fee-free banking.

Ulster Bank has already sold a network of 400 ATMs to US giant Euronet. That company now owns 600 ATM machines here, making it one of the dominant operators in the sector.

People in other countries are charged fees of up to €3 every time they want to withdraw cash from independently operated ATMs.

Chairman of the Consumers' Association Michael Kilcoyne warned the same was likely to happen here.

"At the end of the day, it will cost consumers more money," he said.

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He also said rural areas would suffer because an independent ATM operator would take out a machine if it was not generating enough profit, to concentrate on more populous areas.

Some independently operated ATMs in this country already have charges for tourists whose home account is not in euro. The fees are up to €3.95 for withdrawing their funds in euro.

The two main Irish banks selling around 1,000-plus ATMs between them insist they will retain ATMs in their branches.

One person familiar with the sales process claimed the banks were encouraging bidders to push through fees and charges for those using ATMs in a bid to boost the sales price, but this was denied by the banks.

It is understood that the three main bidders for the Bank of Ireland portfolio include Nasdaq-quoted Euronet.

Euronet already operates 600 cash machines here - it has a market capitalisation of $9bn (€8.1bn) and is one of Europe's largest ATM providers, with a large presence in Portugal, Spain, Greece and the UK. Other bidders are Dublin-based Independent ATM Company, and UK-based NoteMachine.

Euronet is seen as the favourite and is thought to have bid around €20m for the ATM network.

A spokesperson for AIB said it is examining selling a number of its offsite and merchant-filled ATMs.

"AIB will continue to own and manage the ATMs and cash and cheque lodgement devices located across its branch network," it said.

Bank of Ireland, meanwhile, confirmed it has started a tender process.

Any future fees are a matter for individual bidders and will be the responsibility for any new owner.

"However, as part of this process Bank of Ireland has specifically requested that there will be no change to charges for domestic customers for an extended period of time," it said.

It added that in the event of a sale it will continue to operate over 750 ATMs from more than 250 branches.

Director of Dublin-based Independent ATM Company Steve Smith said he could not confirm or deny that his company is bidding for the cash machines of either bank. But he stressed that all its ATMs are free to use in the Republic.

Euronet did not respond to a request for a comment.

The Central Bank confirmed that independent ATM operators are not regulated by it on pricing.

Irish Independent