Watchwords for the Exchange, a Seattle-based ATM network, are "merge" and "grow."

"The answer for networks right now is volume, volume, and volume," said Tom Bass, president of the network. "Where you get it doesn't matter. Generally, it's either merge or grow, but it doesn't matter so long as you get the volume."

The Exchange has done both, and boosted its volume accordingly. Last year, the network merged with Accel, doubling its size and attaining monthly switch volume of a sizzling 7.5 million transactions.

Pursuing a growth strategy, the Exchange recently went on-line with Exclaim, a network that links all members of the local health care community for the exchange of information and funds.

Insurance Forms to E-Mail

More than a medical claims payment system, Exclaim hopes to give health care participants the ability to send and receive a broad array of business and clinical information ranging from highly standardized insurance forms to electronic mail. Physicians, dentists, hospitals, clinics, insurers, labs, and medical/dental suppliers will all be linked.

"What this does is lower administrative costs in the health care industry," said Mr. Bass.

With software design complete, Exclaim entered production in October with transactions between King County Medical Blue Shield and the Laboratory of Pathology. Other organizations, including a hospital, clinic, and two insurance companies, will soon be added.

Strictly Business

Far from altruistic, the intent of Exclaim is to substantially increase volume for the Exchange, thus reducing the cost per transaction.

Another motive is to cultivate this specialized area, thus differentiating the network from others.

"The standard ATM transaction is something that a lot of people can provide," said Mr. Bass.

Member banks will gain through value-added services they offer their health care customers, such as the ability to electronically transfer funds from one account to another. And insurers can pay doctors and dentists electronically, thus reducing processing costs.

Patients can use credit and debit cards to pay their medical bills, and Exclaim also allows such payments to be made in monthly installments.

The Exchange plans to increase ATM transaction growth through marketing programs and member promotions. The network reports that such transactions have increased "dramatically" this fall as the result of a TV ad campaign.

Mr. Bass added that the network expects its debit point-of-sale segment to grow. POS installations in the Northwest have doubled over the past six months, as Safeway and Texaco have come on-line to join the already active Associated Grocers stores, United Grocers outlets, and Arco gas stations.

"As competition continues to increase in this and every other market, the bottom chunk is going to disappear," said Mr. Bass. "So, of course, we think in terms of strategic alliances. We recognize that through economies of scale, we can lower transaction costs."

Mr. Chaney is a freelance writer based in Albuquerque, N.M.

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