Electronic Payment Systems Inc. has settled an antitrust dispute with the Justice Department recently, but it nonetheless finds itself on the defensive.
The Wilmington, Del.-based banking network took exception to the Justice Department contention that EPS' MAC network overcharged its member financial institutions by $100 million in 1993.
During a press conference on April 20, the department said the overcharges sprung from a MAC membership condition that required banks with ATMs on the network to do third-party ATM processing only through EPS units.
Rules Should Be Changed
While acknowledging that such exclusionary membership rules should be changed, EPS adamantly of overcharging.
"Allegations reportedly made last week by the Department of Justice that the MAC automated teller machine network over-charges are unfounded and absolutely false," David Van Lear, chairman and chief executive of EPS, said in a statement.
Mr. Van Lear said EPS had no hand in helping Justice calculate the $100 million figure, and he said he has been given no explanation of how Justice quantified the alleged overcharging.
Figure Not in Decree
He also pointed out that the $100 million figure did not appear in the consent decree the network signed nor in any of the materials supporting decree.
Justice declined to elaborate on how it arrived at the $100 million figure. Spokeswoman Gina Talamona indicated that Justice stood bty its estimate, but said the department wanted to avoid a "We said, they said" debate on a matter that Justice considers closed.
EPS also said that the consent decree clearly states that the business practices it has agreed to change did not violate any laws or regulations -- including those governing the electronic funds transfer industry.
Under the EPS consent decree, MAC member institutions in the Midwest will be able to process with service providers other than EPS starting in October. The same will be true for eastern financial institutions in January 1995.
While EPS had committed to opening itself to competition before Justice filed suit, the pace at which competing processors would be given access to the network.
MAC is one of the largest electronic banking networks in the nation, with more than 14,000 ATMs owned by about 1,500 member institutions.