Magazine article American Banker

Mobil Oil Rejects Interlink, Cites Transaction Fees: Firm Balks at New Costs; Was Willing to Pay for Equipment and Installation

Magazine article American Banker

Mobil Oil Rejects Interlink, Cites Transaction Fees: Firm Balks at New Costs; Was Willing to Pay for Equipment and Installation

Article excerpt

NEW YORK -- The Mobil Oil Corp. has declined to participate in the Interlink point-of-sale system because it does not want to pay transaction fees to the bank, said John Briggs, senior vice president in charge of Mobil's own POS systems.

Interlink is a point-of-sale network being formed in California by the state's five largest banks.

Mobil was willing to pay the substantial costs of purchasing and installing terminals, but it would not pay the added costs of transaction fees, Mr. Briggs said.

A major hurdle in point-of-sale agreements has been the negotiation of who pays for the cost of processing the transactions. Interlink and Mobil have demonstrated their commitment to electronic funds transfer, but advocate different methods of allocating costs.

Interlink's price structure is designed to spread the cost of processing the transactions among the member banks, said John Broderick, senior vice president of Crocker National Bank, San Francisco. Crocker is a member bank of Interlink.

Referred as a switch, the data processing center electronically routes transactions to the appropriate financial institution when cardholders from multiple institutions have access to the same network.

Mr. Broderick declined to elaborate on Interlink's pricing but said that card-issuing banks and banks that sponsor merchants into the network are charged. "The banks that have signed up retail accounts will have no choice but to pass the transaction fees on to the retailers," Mr. Briggs said. The Honor System

Honor, a Florida automatic teller machine network that recently introduced a POS system, only charges the card-issuing bank. Honor charges the banks 20 cents for each transaction, but it gives 15 cents to the bank that signed the retail member up as an incentive.

"Until Interlink comes up with a similar arrangement for pricing, we will not participate," Mr. …

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