Cartel Network, a payment system organized by ATM network pioneer Joseph E. Wolfson, has signed its first participating supermarkets.
Mr. Wolfson, hoping to fill a void that he says has been left by bank- owned payment systems such as NYCE and MAC, said two upstate New York grocery chains - Price Chopper and Tops Friendly Markets - have committed to joining his Cartel program.
A third supermarket company, also based in upstate New York, was expected to sign a contract this week but did not give permission for its name to be announced, Mr. Wolfson said in an interview last week.
All that is preventing the supermarkets from hanging up Cartel Network shingles and performing check cashing and other services under that banner is a data processing and networking arrangement.
Mr. Wolfson, who created the now defunct Metroteller network in New York State in the '70s and is chairman and chief executive officer of Buffalo- based Integrated Delivery Technologies Inc., said he is negotiating with several big-name computer service organizations.
"I fully expect we'll choose a processor within 30 days and be up and running in 30 to 60 days," Mr. Wolfson said.
If he keeps to that timetable, Mr. Wolfson will have confounded a lot of skeptics in the established ATM and point of sale fields. But Mr. Wolfson, whose characteristic enthusiasm often borders on boastfulness, said he has struck a nerve with C artel that promises to have an impact far beyond his first signing.
"We're starting in New York and the Northeast because those are the markets we know, and where we are known," Mr. Wolfson said. "We're talking to people all over the country."
The theory behind Cartel Network was that major retailers lacked clout in dealing with bank-owned credit and debit card networks. Companies like Tops and Price Chopper were up in arms at recent increases in transaction processing fees by MAC and NYCE, the two dominant card networks in their region. Mr. Wolfson launched his new venture late last year as an advocate of the supermarket chains, presenting his network concept as one that could give them negotiating leverage with banks.
"We want to be seen as an alternative, offering something new, and closely aligned with the retailers," Mr. Wolfson said. "They deserve the kind of guidance, assistance, and direction that we can help provide. And we also see in this an entrepreneurial opportunity."
The Cartel Network card can take many forms, but Mr. Wolfson is initially emphasizing "universal check cashing and authorization." I could evolve into a national service, unified by the Cartel logo, with issuing companies' names and logos sharing space on the cards.
Mr. Wolfson also envisions a menu of payment processing services and technologies, ranging from frequent-shopper programs to electronic benefits transfer to smart cards.
A sign of how big Cartel can get is the fact that at least six prominent grocery chains - obviously not all Cartel customers - have agreed to sit on the program's advisory board. Mr. Wolfson, not yet disclosing the members' names, said it will be "a real working group" giving voice to retailers' needs and concerns.
Craig McIntyre, Mr. Wolfson's longtime partner and president of Integrated Delivery Technologies, is spending much of his time organizing the advisory group, Mr. Wolfson said.
"We're not just getting interest from retailers," Mr. Wolfson said. "We're also hearing from banks that don't have equity interests in these networks. We also have some very big banks interested in working with us, because they see the opportunity here. But we want to make it clear we are focusing on the retail component, and we think we'll be successful."