Magazine article American Banker

Sears 'Discovers' First Atlanta's 111 Automated Teller Machines

Magazine article American Banker

Sears 'Discovers' First Atlanta's 111 Automated Teller Machines

Article excerpt

NEW YORK -- The First National Bank of Atlanta has agreed to open its 111 automated teller machines to the Discover card, Sears, Roebuck and Co.'s new general purpose credit card.

The deal, the first such arrangement Sears has made with a bank, will let Discover cardholders get cash from the bank's ATMs when Sears begins issuing the cards around Atlanta this fall. Cardholders will be getting cash advances drawn against the card's line of credit.

First Atlanta will also be handling merchant settlement and disbursement for the Discover card. Sears has been marketing the card to merchants in the Atlanta area.

The Discover card is designed to function as a traditional credit card acceptable by a range of retailers and as a financial services card that is linked to savings accounts and other banking services.

"The use of First Atlanta's network of 111 ATMs throughout Georgia will provide a level of convenience and an added feature which we believe will enhance the value of the Discover card in the marketplace," said Raymond A. Kennedy, executive vice president of Dean Witter Financial Services Group and head of the Discover card program.

Dean Witter is part of Sears' financial services operation, which also includes Sears Savings Bank, Coldwell Banker Real Estate Group, and Allstate Insurance Co.

Sears has also formed a new subsidiary, Discover Card Services Inc., to market the card.

The card is expected to be available around the country sometime next year. "We plan to establish some kind of correspondent banking relationship with various other local banks around the country," said Paul R. Marrone, vice president of corporate communications at Dean Witter.

First Atlanta has one of the biggest credit card operations in the Southeast. It has issued more than one million credit cards, mainly Visa cards, and handles Visa and MasterCard transactions for many merchants.

But First Atlanta's settlement and disbursement activities for Sears will not involve marketing the Discover card to Atlanta merchants, said Thomas F. Chapman, executive vice president at First Atlanta.

'Hiring People on a Massive Scale'

He said Sears has been hiring sales-people from local banks to market the Discover card to merchants. The retailer is "hiring people on a massive scale nationwide in major markets," added a bank consultant who requested anonymity.

According to Mr. Chapman, Sears has also taken out newpaper ads to promote the Discover card to merchants, and these ads say that the card will be issued free to consumers for the first year. …

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