We all love the convenience of automated teller machines (ATMs). The devices have now become an indispensable part of the cultural financial landscape. Whether you're a graduate student on the go, a teen making plans to see the latest Harry Potter film from the folks at Time Warner (NYSE:TWX), or a can't-stop-till-I've-done-a-million-things-today harried soccer mom who needs to pick up that one last item from the local Wal-Mart (NYSE:WMT), simplified access to cash is a luxury many time-sensitive individuals appreciate.

That's why it initially came as a bit of a surprise to me that E*Trade (NYSE:ET) has decided to divest itself of its ATM network. It will sell, according to the press release, "substantially all" of E*Trade Access to ATM operator Cardtronics. My immediate thought upon seeing the news was why the heck is the company doing that? Since E*Trade has a significant banking component in addition to its brokerage model, it didn't necessarily make sense to me.

But then I thought about it and decided that this isn't really a bad move. Not at all. The company will be getting some cash -- $55 million before the effect of the tax guy -- and it will still have some branding capability according to terms of the transaction. CEO Mitchell Caplan just doesn't believe that it is necessary to remain fully invested in this sector, as in doesn't necessarily add enough value to the overall model. Why maintain the ATM system when the net worth of the asset might be better utilized elsewhere? I tend to agree in this case. It's not like this event eliminates the ability of E*Trade's customers to use the money boxes, so I see it as a logical move (E*Trade will continue to refund all ATM surcharges experienced by members of its bank).

The biggest thing E*Trade needs to concentrate on is remaining competitive in the arena of discount brokers, and that essentially translates into providing the lowest commission possible. Ameritrade (NASDAQ:AMTD) and Charles Schwab (NYSE:SCH) will always be strong choices to the retail investor, so it is important for these companies to figure out which service is most sought after by a given demographic. Schwab recently decided that a retooling might be in order, and Ameritrade CEO Joe Moglia spoke with Rick Aristotle Munarriz about his online brokerage's plans and prospects.

These articles will help you gain further insight into the industry:

  • Roger Nusbaum speaks up about Charles Schwab.
  • Alyce Lomax explained how E*Trade is a made company.

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Fool contributor Steven Mallas owns none of the companies mentioned.