Diversified's POS Service Translates Many Terminals

A small firm has introduced a point-of-sale processing service that can capture credit card transactions from a wide variety of older or specialized merchant terminals.

The Translink system, developed by New York-based Diversified Transactions Inc., enables banks to process card transactions for small and midsize merchants without requiring them to install expensive new equipment or reprogram their existing devices.

Diversified developed Translink for Chemical Bank New Jersey, which has many small and medium-size merchant customers that were using an older POS devices.

Data Conversion

Rather than install new equipment at the merchant locations, the bank went to Diversified for a solution.

The system developed converts transaction messages and protocols into formats necessary for processing through the settlement networks of Visa or MasterCard.

The hardware and software were developed by Diversified engineers. The company is a subsidiary of Diversified Investors Corp.

Most of the merchants are using devices from the Eastern States Bankcard Association, a regional card processing cooperative that was acquired in 1988 by First Data Resources Inc., a subsidiary of American Express Co.

Other Customers

A large New Jersey bank and a large retail chain store in the Northeast, which Diversified officials declined to identify, have also signed up for the processing service.

The Translink service has cheaper per-transaction rates than other processors, said company officials.

Diversified said it usually requires that when a bank signs up for Translink it turn over part of its volume of its existing POS transactions.

Large and small banks are aiming card processing services at small merchants because the market for large ones is saturated.

Special Feature

Chemical, like other banks, uses large processors such as First Data Resources for processing most merchant transactions.

But not all processors handle transactions from old or specialized POS devices, and converting the merchant to a new point-of-sale system can take months.

Small merchants with older devices "are becoming more and more important" to banks offering merchant services, said Charles Keil, senior vice president at Chemical. "We lost some merchants last year because First Data couldn't support the terminals they wanted to use. Translink works for us and it works for the merchants."

The system can be used "as a marketing tool for banks to secure new retail accounts or to prevent defection of unhappy processing customers," said Lewis N. Pergament, senior vice president at Diversified Transactions.

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