Magazine article American Banker

M&I, Metavante Strengthen Debit Processing Ties

Magazine article American Banker

M&I, Metavante Strengthen Debit Processing Ties

Article excerpt

Marshall & Ilsley Corp. has agreed to make Metavante Technologies Inc.'s NYCE Payments Network LLC debit unit the Milwaukee company's exclusive network for most PIN debit transactions at the point of sale.

Such arrangements are becoming more common because debit networks, which historically offered only regional coverage, have expanded in recent years and now can give consumers payment capabilities at almost all merchants. The deals typically are designed to lower issuer costs and increase network volume.

Steve Rathgaber, the president and chief operating officer of NYCE, said that the deal announced Tuesday would increase M&I's debit revenue and "optimize the earnings of their card portfolio."

He would not say whether the deal would involve letting more interchange revenue flow through the merchant to the bank or other aspects of pricing. "More value flows to them by the time all the t's are crossed and the i's are dotted," he said.

Debit card use is growing briskly, especially at the point of sale. In 2006 the cards were used for 27% of all noncash payments, compared with 33% for checks, the Federal Reserve Board reported last month. In a similar report three years earlier, checks led debit 46% to 19%. (Credit cards held steady in both reports at 23%.)

Mr. Rathgaber said the growth of debit has changed the payment industry. "What used to be 'ATM networks' are now used primarily for point of sale transactions," by a margin of 3 to 1 or more.

The NYCE network is accessible from 99% or more of payment terminals, he said. "We work very closely with the point-of-sale processing community to assure that we have essentially ubiquitous coverage."

In addition, NYCE will be the primary network for M&I's automated teller machines. M&I has branches Arizona, Florida, Illinois, Kansas, Minnesota, Missouri, Nevada, and Wisconsin. …

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