Cash Station Inc. announced it will reduce the transaction fees it charges for on-line point of sale services by one-third.
The move brings the Chicago-based network's debit service fees more in line with other regional electronic funds transfer services.
"We know what the other big networks are charging, and we think our new pricing is very comparable to theirs," said James H. Hayes, general counsel for the top-20 network.
As of Jan. 1, the network's point of sale switch fees will decline from 6 cents to 4 cents per transaction for issuers, and from 10 cents to 7 cents per transaction for acquirers.
BankMate, which is based in St. Louis, charges acquirers 2 cents per transaction and charges issuers 4 cents. It also collects what it calls a "guarantee fee" of 5 cents on any approved transaction which is paid by the issuer to the acquirer.
Cash Station does not charge any additional interchange fee, a rare stance for a network.
However, four other Midwest regional networks have adopted an even more unusual policy: They do not charge their acquirers any fees. The four networks, each of which overlap Cash Station's territory, are Magic Line, Money Station, Shazam, and Tyme.
"The merchants just love us up here," said James H. Martin, president of Tyme.
Cash Station, which touts itself as a more active player in the point of sale world than its four competitors, said its pricing reflects networks that have contracts with major national accounts like Mobil and other oil companies.
Cash Station, which launched its point of sale program in 1992, says it processes more than 800,000 on-line point of sale debit transactions per month. More than 1,000 merchants accept Cash Station cards for purchases. Including the national oil company accounts, Cash Station cards are accepted at close to 12,000 point of sale devices nationwide.
This significant rate of growth is what propelled the Cash Station board to reduce fees.
"On-line POS debit is the most efficient payment option available today," said Stephen S. Cole, president and chief executive of the network. "We hope this announcement reminds both issuers and acquirers of the economic value, security, and convenience provided by PIN-authorized debit payments."