Automated Teller Machines Are Going West; and They've Come to Colorado, Where Competition between the Giants Is Intense
Welch, Randy, American Banker
Financial centers pushing into Colorado are already using automated teller machines as one method of expanding their customer base. Speculation about future techniques for using these machines indicates the battle is just beginning.
Skiers with Plus cards can use ATM-like machines this year for the first time to purchase passes for the ski lifts directly at Vail and Beaver Creek resorts. In-state Plus and Cirrus cardholders can use the cards for automatic check approval in machines at the King Sooper's grocery chain, according to Malcolm Jones, president of Minibank Switch Network, which is a member of Cirrus. Mr. Jones acknowledged that the system is the first step to debit cards.
But away from the much discussed possibilities for linkage with retail outlets, financial institutions themselves bear watching for how they employ the new machines.
Citicorp, as always, causes nervous tremors because of its size and aggressive posture. Spokeswoman Beverly Wolfson said it employs 2459 people in the state -- a total for the company which is third only to New York and California.
Its various divisions in Colorado include the international headquarters for Diners Club/Carte Blanche, Citicorp Acceptance Corporation (dealer financing for cars and mobile homes), Citicorp Retail Services (private label cards), Citicorp Person-to-Person loan offices and six industrial banks, Citicorp Financial (the Choice card), Citicorp Information Resources (service and data processing), Citicorp USA (commercial loans), Citicorp Real Estate, Citicorp Industrial Credit, Energy Extraction and Processing Industries (energy loans), and an audit division. Citibank's New Card Holders
Despite the Diners Club and Carte Blanche headquarters, neither they nor Citicorp MasterCards can be used on ATMs in the state. Ms. Wolfson also said Visa Cards issued by the bank are not linked to the national Plus system. The Choice card, on the other hand, is linked to the Cirrus system, and to a few proprietary Choice ATMs. In just over one year of marketing the card in Colorado's Front Range, the thickly populated strip next to the Rocky Mountains, the bank picked up 100,000 card holders, according to Ms. Wolfson.
The linkage with Cirrus in Colorado looks like a case of local institutions throwing open the door for the wolf. United Bank of Denver, First Interstate Bank of Denver, and Columbia Savings and Loan are the three founders and owners of Minibank, which is the Cirrus network in Colorado, explained Mr. Jones. He added that their arrangement with Citicorp gives Choice cardholders access to more than 200 outlets in the state, but that Minibank cardholders gained access to less than 50 of Citicorp's "Choice Cash" machines, located mostly at airports.
"It's not at all balanced," said Mr. Jones, "but technically, we couldn't leave them out." State law requires admitting to the network any Colorado institution that meets the minimum standards, and Citicorp's industrial banks qualified. "Plus there was a feeling we have to be able to compete with out-of-state organizations," Mr. Jones added. "We already compete in other ways. We'd be foolish in the long run to deny them access, even if we had the capability of doing so."
Citicorp's strategy, then, appears to be to surround the marketplace. Ms. Wolfson acknowledged that an interlinked system offering a wide range of financial services is desirable in the long run. However, she declined to comment on what Citicorp may be considering as its next step in that process.
Bank of America, Citicorp's giant rival, has also entered the market in a number of ways. There is BancAmerica Acceptance Corporation, BancAmerica Industrial Bank, several Finance America loan-only outlets, Charles Schwab brokerage outlets, and credit card solicitation. BofA kept Seafirst Commercial bank -- acquired in the takeover of Seafirst in Washington -- but sold off the three industrial banks inherited from Seafirst. …