The co-branded kiosks will provide an ANZ ATM on one side and a Telstra Payphone on the other.

The ATM-Payphone kiosks will be installed in locations that experience high pedestrian and retail traffic with an initial pilot in up to five locations in Melbourne's suburbs. Today's announcement will officially launch an installation in Centre Road, Bentleigh in Melbourne's south-east.

ANZ Managing Director Consumer Finance Ms Jenny Fagg confirmed that the service was the first of its kind in Australia and was modelled on successful multi-functional payphone kiosks in the United Kingdom.

"These new kiosks are a convenient and innovative way to provide banking and phone services to customers in popular shopping locations," Ms Fagg said. "The high visibility and strategic presence of these kiosks provides customers with another option for accessing these community services.

"We approached Telstra with the concept and we have worked closely together over the past two years to bring this concept to reality.

"We want to provide our customers more convenient banking services by continuing to expand our branch and ATM network. ANZ has added more than 300 ATMs and 22 full service branches in the past 12 months, bringing our network to 775 full service branches and more than 1,900 ATMs.

Telstra Executive Director Customer Sales and Service, Mr John Rolland said Telstra was always looking at innovative ways to ensure payphones remained relevant to customers. "The dual purpose kiosks are a way of breathing new life into Telstra's payphones," Mr Rolland said.

"The proliferation of mobile phones has certainly impacted on payphone use in recent years, so we are continually looking at ways of reinvigorating our payphone service and creating additional value for customers. A further example of our payphone innovation was when we used selected payphones in the Melbourne and Sydney CBDs to create WIFI hotspots, giving customers Internet access without cords and cables

"We're hopeful that the latest pilot will help us identify new ways to save costs and increase revenue, which in turn helps us maintain more payphones for the community's use," Mr Rolland said.

A number of safety features have been included to ensure that customers feel secure when accessing the ATM-Payphone kiosks, including additional structural support to withstand physical force and a new ink-staining system called Fluiditi that will immediately dye all stored bank notes upon any attempted theft of the device.

The pilot will run for approximately six months and further rollout will be based on customer feedback on the concept.