Magazine article American Banker

Popular's PIN Debit Arm Has U.S. Deal with NYCE

Magazine article American Banker

Popular's PIN Debit Arm Has U.S. Deal with NYCE

Article excerpt

Hoping to boost transaction volume and reduce processing costs for merchants, NYCE Payments Network LLC has started carrying transactions initiated by customers of banks on Popular Inc.'s Puerto Rican PIN debit system, ATH Network.

Jorge Hernandez, ATH Network's senior vice president, said in an interview Thursday that the main goal of the agreement is to allow cardholders to use their PIN debit cards at mainland U.S. retailers.

ATH Network, which is operated by Popular's Evertec Inc., covers Puerto Rico, the Virgin Islands, the Dominican Republic, Costa Rica, and El Salvador. However, the agreement with NYCE, a unit of Marshall & Ilsley Corp.'s Metavante Corp., affects only about 2.2 million customers in Puerto Rico and the Virgin Islands.

"We have a lot of cardholders that travel to the U.S., and they can access the ATMs," but they could not use point of sale terminals at retailers, Mr. Hernandez said. "We were looking for an opportunity to provide that additional service to all cardholders on the network."

The two networks began testing the new service around Thanksgiving, and it became fully operational Monday, he said.

Mr. Hernandez said that ATH expects cardholders to generate about a million transactions a year on the NYCE network, though he also said that such estimates are largely guesswork at this point. "It's very hard to make that projection, because we don't have much experience of the POS world with our cardholders in the U.S., because they cannot do those transactions today."

Steve Rathgaber, NYCE's president, said that the deal is "essentially identical" to one that his company forged in 2004 with the Canadian PIN debit network Interac Association to let consumers there use their PIN debit cards throughout the United States. The Interac agreement has generated significant transaction volume, and Interac cardholders often spend more per transaction than U. …

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