JP Morgan Chase & Co. is in the process of testing $5 and $4 ATM usage fee for non-customers in Illinois and Texas.

WSJ reported that major banks which include TD Bank Financial Group and PNC Financial Services Group are modulating their ATM policies to charge more fees to offset the expected loss of billions of dollars subject to new federal regulations which will impact overdraft charges and debit cards.  

Currently, Chase charges $3 from non-customers when its ATMs are used. Banks don't charge their own customers for using their ATM facility but levy a charge on non-customers. However, banks levy fees on their customers when they use a rival bank's ATM grid. Thus, a customer can end up paying more than $5 per transaction.

Banks justify the costs by arguing that they have to spend $12,000 to $15,000 a year to maintain each ATM. ATM's generated $7.1 billion in annual fees in 2010 out of which banks collected $3 billion from their own customers for transacting with other bank ATMs.

A report by American Bankers Association (ABA) stated that there are 425,010 ATMs across the country. The average cost of an ATM depending on the functions ranges from $9,000 to $50,000 per machine. In 2008, an annual total of 11.8 billion ATM transactions were recorded. The average monthly transactions per ATM stood at 3,105 in 2008.

About 290,000 of the total number of ATM are located outside the bank branches. The top five ATM owners are: Cardtronics with 32,856 ATMs, Payment Alliance has 26,000, Bank of America has 18,426, JP Morgan Chase has 14,144 and Wells Fargo has 12,353 ATMs.

The monthly cost of maintaining an off-branch ATM is $1,194 -based on 2007 data. The key cost components include $244 for maintenance, $250 for rent, and $152 for cash replenishment and $100 for telecommunications

According to 2009 data, the most used banking method by Americans was -- Branch 21 percent, ATM 17 percent, Online 25 percent, Mail 9 percent and Telephone, cell, PDAs 5 percent.

While banks tap on the revenue potential of ATMs via non-customers, Greg McBride, senior financial analyst at told WSJ: "The reality is that bank revenue is being squeezed by regulatory changes and the banks are going to be accounting for that in other areas."