ATM Networks Plan an On-the-Job New Year's Eve

NYCE Corp. president Dennis F. Lynch will ring in the new year from the control rooms of his company's data center in northern New Jersey.

The automated teller machine network's nerve center will be transformed into a year-2000 command post. Senior executives, software technicians, communications managers, and others will take turns keeping a constant watch on operations.

What would normally be a skeleton staff of half a dozen will increase tenfold. Employees have been invited to bring their spouses to a New Year's party - no alcoholic beverages served - and the company has even reserved 35 hotel rooms to make the weekend-long marathon more palatable.

Other networks plan similar vigils. Some 18 to 21 hours before U.S. clocks strike midnight on Dec. 31, executives will be checking in with counterparts in New Zealand, which will hit the new year first. Networks are making special plans to give their member institutions up-to-the-minute information, and toll-free media hot lineswill be available as a central clearing house.

Having spent spending tens of millions of dollars on technical preparations for the date change, network presidents say systems glitches are the least of their worries. Their worst fear is that a mad rush for cash could leave machines drained and consumers vulnerable to theft, so they have turned their attention to reassuring the public.

"Our greater concerns are not the technology … it's consumer psychology," said Ron V. Congemi, president and chief executive officer of Maitland, Fla.-based Star Systems Inc., the largest network. Star is offering member institutions decals that can be affixed to ATMs to indicate they are year-2000-ready.

According to a Gallup survey, most cardholders are confident that their cards will work, and trust is growing. The survey - conducted in August, September, and October among 2,117 adult ATM/debit card holders - found 86% expressing confidence that their cards would work on Jan. 1, up from 79% in April.

But Mr. Congemi said the 14% minority of doubters is nothing to sneeze at.

"With every Gallup poll result that we see, although the percentages have come down, it is still a large enough percentage that it's bothersome," he said.

If all those cardholders hit the ATMs for maximum withdrawals on Dec. 31, "these machines are going to run out of money," he said, and it will not be because of Y2K.

Indeed, a study conducted in September by the research firm Brittain Associates of an Atlanta found that more than 31 million U.S. households plan to stockpile cash - enough to last several weeks - as a Y2K precaution. Brittain interviewed more than 1,000 cardholders by phone.

The Federal Reserve is preparing for the possibility of increased demand. As of Sept. 30, it had roughly $200 billion in its vaults - about $50 billion more than it would typically have.

ATM network executives say consumers should do what they would normally do in preparation for a long weekend. Stan Paur, president and chief executive officer of the Pulse network in Houston, said: "On holiday weekends we tell people to leave for the airport early. If they do think they're going to need extra cash for this long and extended weekend, don't wait until the last minute and get it a little in advance."

Mr. Lynch, who plans to spend the weekend at the NYCE data center, said, "It's fair to say that financial institutions are more prepared to keep their ATMs replenished and stocked … that weekend than any other weekend in history." Still, there is a limit to what the machines can accommodate, he said.

Networks have collaborated on public relations campaigns through the Network Executives Council of the Electronic Funds Transfer Association, which also represents Cash Station Inc. of Chicago; Co-Op Network of Ontario, Calif.; TYME Corp. of Brown Deer, Wis.; and MAC of Wilmington, Del.

Networks are also providing tips to their financial institution members, urging that they make preparations beyond stocking ATMs.

Banks may want to beef up their supplies of receipt paper for an increase in balance inquiries, the networks say. Also, they say, banks should make sure that machine-error messages specify when problems are account-related, so that they are not mistaken for Y2K glitches.

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