Western Union Says First Data Won't Mind Genpass P-P Deal
Breitkopf, David, American Banker
There's something curious about Western Union Financial Services Inc.'s deal to open Genpass Inc.'s 20,000 automated teller machines to the new Western Union Money Transfer person-to-person service.
The odd part is that Western Union's parent company, Denver-based First Data Corp., recently closed on its acquisition of NYCE Corp., which runs a much larger electronic funds transfer network and has developed its own person-to-person payment service, though it is not in commercial use yet.
Western Union and NYCE executives, however, said their person-to-person services have key differences and hence can peacefully coexist under the same corporate umbrella.
"It's like a lot of companies with different brands for the same product with different price points with different markets," said James Judd, a senior vice president with NYCE, of Woodcliff Lake, N.J. He said he did not see any conflict of interest in the two money transfer systems, or with Western Union's decision to work with a rival EFT firm.
Genpass, of Fort Washington, Pa., operates two electronic funds transfer networks in addition to its ATM network. The company was founded last year by veteran EFT-industry executive Bipin C. Shah, who used venture capital to buy the MoneyMaker and Money Belt EFT networks and said he aimed to buy more networks.
The Genpass-Western Union agreement was announced Oct. 11. Starting in early 2002 the service will let consumers send money through Western Union agents to recipients at designated ATMs, using a one-time-use password rather than a credit or debit card to have the funds transmitted in the form of cash. Eventually people will be able to use the teller machines on the sending end.
Customers sending money will choose a "sender ID number" containing four to 10 digits, and the Western Union agent (or, ultimately, the ATM) will assign them a six-digit confirmation number. After the money has been sent, the sender will contact the recipient to impart the sender ID number, confirmation number, and amount of money sent. By entering these three sets of numbers into a Genpass ATM, the recipient will be able to extract the cash.
Western Union, also of Denver, pilot-tested the service last year and says it is now looking to create "ubiquity" for it throughout the United States.
Genpass, which will have to upgrade its teller machines to accommodate the person-to-person service, will receive switch fees for processing the money transfers. "Providing around-the-clock access to money transfers expands the functions consumers can transact at an ATM," said Mr. Shah, its president and chief executive officer. …