Cash Station Inc. has selected Electronic Data Systems Corp. to handle core transaction switching services for the regional automated teller machine network.
"We're very excited about this partnership," said Stephen S. Cole, president and chief executive officer of Cash Station. "EDS is offering us brand-new technology. They can take us in new directions, which our members want."
Neither party disclosed the contract price.
Under terms of the agreement, EDS will take over ATM switching functions Nov. 1, 1995.
Until then, the Chicago-based network will continue to use Midwest Payment Systems Inc., a unit of Cincinnati's Fifth Third Bancorp., which had supplied Cash Station's switching services for eight years.
Mr. Cole said Cash Station was not dissatisfied with either the cost or quality of MPS' services but felt a fiduciary responsibility to put the switching out for bid.
About this time last year, Cash Station had agreed to merge with Magic Line Inc., the dominant regional ATM network in Michigan. In that deal, which later fell apart, NDB Bancorp of Detroit, a partial owner of Magic Line, would have taken over Cash Station's processing.
When the Cash Station/Magic Line merger fell through last May, Cash Station decided to request proposals from other vendors of switch services.
"EDS rated highest on all four of our key criteria: cost, quality, functionality, and management philosophy," said Mr. Cole
The contract is viewed as a big win for EDS, which supplies switching services to several smaller ATM networks. With the Cash Station business, EDS adds a network of 500 member banks, 2,900 ATMs, and four million cardholders.
More than 350 merchants deploying more than 9,000 point of sale terminals also participate in the network. It processes about 90 million interchange transactions per year.
"I think Cash Station selected EDS because of the broad base of consumer interactive products that we have experience in," said Neil P. Marcous, vice president and general manager in EDS' electronic commerce division.
"With us, Cash Station will let the banks provide new service offerings with great fee-based potential," he added.
The agreement between EDS and Cash Station will let the networks membership take advantage of EDS' full menu of processing services, including cardholder authorization, terminal driving, and gateway access to more than 50 national and regional networks.
"A key objective in our switch selection process was to obtain the ability to offer our members an expanded array of services, both traditional and new," said Mr. Cole.
"A recent member survey revealed that a high proportion of members are interested in one-stop shopping and want to purchase chase processing services directly from the network," he added. "EDS can take us in that direction."
According to Mr. Cole, Cash Station is also interested in offering members new products and services, such as home banking, bill payment, smart cards, and interactive consumer home services, all of which EDS is aggressively pursuing.