Richard N. Garman already knows what it's like to swim with sharks, so becoming a part of the competitive electronic funds transfer business should come easy.

An avid outdoorsman who enjoys scuba diving and skiing, Mr. Garman is to join Electronic Payment Services Inc. on Aug. 28 in the newly created post of president and chief operating officer.

The merger-and-acquistion dealmaker from Montgomery Securities Inc. in San Francisco will oversee the financial, marketing, and technology areas at a time when the Wilmington, Del.-based company has its eye on expansion.

"The industry is very competitive - for processing companies like EPS as well as for the financial institutions that we serve," said the 38-year-old Mr. Garman. "We are a vehicle that empowers the financial institutions to move forward. We can provide tools and products and services that allow our financial institutions to profit and expand their business at the same time we expand this business."

Mr. Garman will supervise the technological conversion and integration of EPS's equity owners: National City Corp., Keycorp, CoreStates Financial Corp., Banc One Corp., and PNC Bank Corp.

At the same time, he will explore new areas for product and service enhancements.

"The vast bulk of my time I expect to be concentrating on our customer base and the strength of our product offerings," said Mr. Garman. "If you don't have the fundamental service offerings and retention of clients, you won't be able to attract new outside investors."

EPS management has made it clear that it would be interested in attracting up to four more equity owners.

In fact, the organization, which runs the MAC automated teller machine network and ranks first among regional networks in transactions processed through its central switch, suffered a rare setback earlier this year when Mellon Bank Corp. backed out of an agreement to become a sixth owner.

Mellon had intended to pay $29 million and transfer control of its network services division, which processes transactions for other banks and networks, to EPS.

"Losing Mellon was a double whammy," said an industry consultant who requested anonymity. EPS "lost the scale they would have achieved by driving terminals for Mellon, and they gained a competitor."

Under the terms of a consent decree with the Department of Justice, EPS also dropped its membership rules that prohibited financial institutions from using a third-party ATM processor other than EPS. The consent decree was signed in April 1994, and Mellon Network Services picked up its first MAC customer a year later.

An EPS spokeswoman confirmed that several other third-party processors, including Infinet Payment Services Inc. and its NYCE network, have been certified.

Mr. Garman downplays the negative effect of the consent decree. "The consent decree was a trigger event for changes EPS had already anticipated and planned," he said. "I think the company has some very positive things happening. It's sizable, well-established, with strong people and good product offerings. All of these things will make my job easier."

Mr. Garman says he will concentrate on the explosion in point of sale debit and look for opportunities for EPS to capitalize on that growth.

Reporting to Mr. Garman will be John F. Beahn, chief marketing officer; Jeff Michel, chief technology officer; and Richard C. Schwenk 3d, chief financial and administrative officer.

Mr. Garman, in turn, will report to David Van Lear, chairman and chief executive officer.

"Richard is high-energy, bright, and articulate," said Mr. Van Lear, "with a keen appreciation of financial services."

Mr. Garman has been a principal at Montgomery Securities for the past three years, with corporate finance responsibility. The job gave him familiarity with EPS; Montgomery was the investment bank adviser at EPS' formation, in 1992.

Mr. Garman was also the point man when National City became a new EPS owner earlier this year.

Mr. Garman and his wife will be relocating to the East Coast, where they hope to find new, interesting sites for scuba diving.

That is, if he can take a break.

"Historically, I've spent too many hours in the office," he said. "But there are no 40-hour-per-week jobs, and if there are, this certainly is not going to be one of them."

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