Magazine article American Banker

NYCE, to Cut Costs, Moves Hub Processing In-House

Magazine article American Banker

NYCE, to Cut Costs, Moves Hub Processing In-House

Article excerpt

After years of using Deluxe Data Systems Inc. as its central transaction-switching facility, the NYCE network has decided to move the operation in-house.

NYCE - the nation's second-largest automated teller machine network - expects to open a data center in New Jersey by the fall. Through this hub, all of it members' ATM and point-of-sale in interchange transactions will be routed to the appropriate financial institutions.

NYCE officials said the move is motivated by a desire to reduce operational costs and gain better control over its role in the burgeoning point-of-sale and electronic benefits-transfer businesses.

"We are optimistic that we will eventually pass along cost efficiencies to our memeber banks in the form of lower fees," said Joan L. Savarese, vice president of marketing at NYCE, Hackensack, N.J.

"But, more importantly, we feel an in-house arrangement gives us better control over our products and strategic direction."

At its new data center, NYCE will install fault-tolerant computers from Tandem Computers Inc. that will run the same transaction-processing software currently used by Deluxe Data. The network also plans to contract with an undisclosed third party for backup computer services in case of an emergency.

Though moving its processing operations in-house sharply curtails NYCE's involvement with Deluxe Data, the network will still use Deluxe's Gateway services, which connect NYCE to a number of other national and regional networks around the country. …

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