The separate worlds of supermarkets and credit cards are merging fast, and two Ohio banking companies are at the forefront of the movement.

Early this fall, Banc One Corp. plans to begin testing MasterCard and Visa cards in 60 midwestern supermarkets in a joint venture with Advanced Promotion Technologies, a Pompano Beach, Fla., electronic marketing company.

Meanwhile, Fifth Third Bancorp and the Kroger Co., the nation's No. 1 supermarket chain, will test-market a cobranded MasterCard in Texas. Mailings to consumers began Aug. 16, according to an official at the bank.

The two approaches utilize different technologies and offer different cardholder incentives. But each card is unique in that it will give customers benefits for using it outside of the cobranding partnership.

They are also raising the intensity of the bank-supermarket courtship, which until recently revolved mainly around check-cashing relationships and debit card systems.

"There is a tremendous amount of banking going on at supermarkets," said Jerome Svigals, publisher of Smart Cards and Comments, a newsletter in Redwood City, Calif. "For instance, more transactions like check cashing occur at supermarkets than at banks."

Mr. Svigals believes it is significant that Banc One, historically a bellwether of credit card innovation, sees supermarkets as a next frontier. It is also incorporating cards with computer chips inside -- the "smart cards" that Mr. Svigals advocates -- into its program with Advanced Promotion Technologies.

Fertile Ground

The $286 billion supermarket industry is attractive to banks because it is the biggest merchant category that is not significantly penetrated by credit cards. In all, 39% of supermarkets accept credit cards, up from 17% in 1989. Research indicates that at least 20% of supermarket shoppers would use a credit card to pay for their purchases.

Supermarkets, on the other hand, are drawn to bank cards in order to remain competitive with nonfood retailers. Grocery chains, especially those with large "super stores," have expanded into nonfood lines such as electronic appliances, cosmetics, clothing, and other products for which consumers are accustomed to paying with credit cards.

The growth in supermarket credit-card usage, for food or other merchandise, also dovetails with the move to debit transactions using regional automated teller machine cards or systems operated by MasterCard or Visa.

The supermarket card of Bank One Columbus -- the first U.S. MasterCard or Visa with the computer chip -- will be cobranded with Advanced Promotion Technology's Vision Value Club.

Data for 'Micromarketing'

The existing Vision Value card tracks frequent-shopper points and accumulates data on customer preferences that stores use for "micromarketing." For example, a buyer of a given brand of laundry soap might get a coupon to encourage the purchase of a related brand of bleach.

Frequent-shopper points can be applied toward a free gift from a catalogue. The gifts range from sunglasses to bicycles, which would cost 82,500 points.

Twenty points are granted by the manufacturer for every dollar spent on a participating product or brand. APT adds one point to every dollar spent at the store.

Banc One will also give a point for each dollar spent anywhere on its more widely usable MasterCard and Visa cards.

The Vision Value card was tested in 1989 and is currently established in five supermarket chains in Ohio, Alabama, Minnesota, Wisconsin, New Mexico, Iowa, and Illinois.

Thousands of Stores Targeted

Nearly 800 more stores have committed to install the computer terminals necessary to read the smart card. The venture hopes to sign up several thousand stores nationwide.

APT is responsible for keeping track of the total number of points. but Bank One tallies the points earned outside of the participating stores, passing the information along to APT.

In a slightly different approach to retaining customers, the Fifth Third-kroger card is geared toward rewarding loyalty with free groceries instead of catalogue gifts.

"There is more instant gratification with our program," said Tim Ballinger, senior vice president of Fifth Third Bank in Cincinnati.

Kroger cardholders can earn up to $500 in store rebates. These can be redeemed immediately at the point of sale or can be taken in a lump sum at the end of the year and spent in any way the customer chooses.

Customers will also receive coupons for Kroger merchandise in their monthly credit card statements.

And by the end of the year, Mr. Ballinger expects an electronic couponing program to be in place, which will automatically give discounts for promotional items when a bar code that is on the card is swiped over the scanner.

Outside Merchants

The bar code also allows consumers to accumulate rebates without actually using the credit card to pay for groceries at Kroger stores.

Kroger has negotiated relationships that would give its cardholders discounts or rebates for using selected merchants, such as a hotel chain or car rental agency.

The card comes in two versions - gold at 2.9% over the prime rate and silver at 8.9% over prime. Neither has an an annual fee.

Bank One is not yet disclosing its pricing, but an official said it will be offered with and without an annual fee.

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