New Powerhouse Puts the Banking Industry on Notice
Ferring, Judy, American Banker
When CoreStates announced in July that its MAC ATM network would be merging with the networks of three other superregional banks, thereby forming a mega-network called Electronic Payment Services Inc., shock waves reverberated throughout the industry.
And though executives at EPS are keeping mum pending Federal Reserve approval of the merger plans, there's no doubt that the new network,is one of the first signs of major changes ahead for ATM networks.
Consolidation of the nation's ATM networks was inevitable, and in fact was already under way. From a high point of about 150 in the late 1980s, there are now 86 across the country.
"We'll probably end up with a few superregionals. If I had to hazard a guess, I would expect about a dozen to survive," said James B. Moore, president of Mentis Corp., an Eden, Md.-based research and consulting firm.
EPS will replace at least four network names on the current industry list: Banc One Corp.'s Jubilee; PNC Financial Corp.'s pair, Owl and Trinet; and Society Corp.'s Green Machine. The alliance is expected to keep CoreStates Financial Corp.'s MAC brand as its own.
Though ATM analysts are sure there will be more acquisitions within the alliance, EPS is studiously avoiding any comment about where and when.
As it stands now, the network would link the machines of 1,400 financial institutions in 16 states, In time, annual volume is expected to reach 670 million point-of-sale payments, including both debit and credit transactions, through about 150,000 terminals in 48 states.
As for the marketing thrust at EPS, past and current performance by MAC, the alliance's apparent lead brand, suggests to analysts that it may be more consumer oriented than most networks have been.
Traditionally, networks have marketed to banks, which in turn have marketed to consumers, Mr. Moore noted. But MAC, more than most ATM networks, has worked to make its name known to consumers.
Whereas network logos are usually small icons on ATM faces and on the backs of ATM cards, the MAC logo frequently appears on large signs outside bank branches. And this fall, just as the nation's holiday shopping spree gets under way, "MAC vans" are traveling to stores participating in a sweepstakes promotion that offers a family trip to Walt Disney World as the grand prize.
The promotion encourages consumers to use their MAC cards for purchases made through Dec. 31. Their signed purchase receipts will be accepted as entry slips for the sweepstakes, and can be turned in to the MAC vans, which will also distribute "loads of holiday surprises."
MAC's established franchise with consumers could give EPS an edge in signing up more banks, either as customers or new partners, if it sticks to contiguous markets where that recognition has spread. …