Magazine article American Banker

Vendors Hope to Ride Wave of ATM Consolidation

Magazine article American Banker

Vendors Hope to Ride Wave of ATM Consolidation

Article excerpt

The consolidation of the regional electronic banking industry has spelled doom for many small networks, but it may prove a boon to companies providing services beyond basic transaction switching.

Transaction Network Plus Inc., New York, and Comtrac Corp., Dallas, each view the concentration of automated teller machine and point of sale services in the hands of fewer players as a rare opportunity to expand their respective businesses.

Transaction Network 'Plus is a point of sale merchant processor with a focus in the Northeast. Comtrac supplies small financial institutions with the means to operate their own automated teller machines.

Striking Counterpoint

The companies' optimism is a striking counterpoint to the resignation to acquisition displayed by the numerous small networks whose business is based on switching automated teller machine transactions between financial institutions.

The number of these regional high of more than 150 in the mid-1980s to less than 60 today.

"There are going to be opportunities of various sorts opening up to those who can find niches among the services offered by the big networks," said Liam Carmody, a principal at Carmody & Bloom, a consulting firm in Woodcliff Lake, N.J.

Transaction Network Plus and Comtrac are confident that they have found two such niches.

The NYCE Connection

Transaction Network's fortunes are tied closely with those of the NYCE electronic banking network, which is New York's largest.

More than 500 merchants accepting bank-issued NYCE debit cards currently rely on Transaction Network to process point of sale debit transactions and to procure the funds backing those transactions.

But as NYCE approaches the finalization of its merger with New England's dominant network, known as Yankee24, Transaction Network said it will benefit from dealing with the resulting larger entity, which is to be known as Infinet Payment Services Inc. …

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