Magazine article American Banker

Buyout Entangles Gulf's Deal with Penney Systems

Magazine article American Banker

Buyout Entangles Gulf's Deal with Penney Systems

Article excerpt

NEW YORK -- J.C. Penney Systems Services Inc., the data communications subsidiary of the nation's third largest retailer, has been marketing its credit card authorization and settlement service to the oil industry for nearly two years.

Penney's effort has netted only three customers, but they are big ones: Gulf Refining and Marketing Co., Shell Oil Co., and Amoco Oil Co.

Penney uses its nationwide communications network to connect service stations with the oil company's credit card processing center so that the firm's credit cards can be handled electronically at the station. The system eliminates the need for the oil company to keep track of paper sales slips.

But recent upheavals in the petroleum industry make the long-term commitment of Gulf to Penney's service uncertain.

The Chevron Corp. has purchased the Gulf Oil Corp., which owns Gulf Refining and Marketing. And a Chevron subsidiary, Chevron U.S.A. Inc., is developing its own electronic authorization network for credit card transactions.

Gulf, which is still operating independently of Chevron pending the fulfillment of certain Federal Trade Commission requirements, says it is still committed to the Penney network.

"We have proceeded with the J.C. Penney network all along," said Dorothy E. Brown, a public communications representative for Gulf Oil in Houston. "Whether or not that will continue is something that we have no way of telling."

"We have a long-term contract with Gulf," said Robert A. …

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