Larry McNabb, former chairman and chief executive officer of BankAmerica Texas, has been named chief executive officer of Primary Payment Systems Inc.
A 25-year banking veteran, Mr. McNabb, 48, has come out of retirement to help Primary Payment build and promote its national data base of checking account information. Banks use the data base to identify potential cases of check fraud.
Formed in 1995, San Diego-based Primary Payment has 43 participating banks, including First Union Corp., Barnett Banks Inc., and BB&T Corp., which joined in June.
Leslie Michelassi, senior vice president at Primary Payment, said Mr. McNabb is one of the originators of the checking account data base concept.
Mr. McNabb said the data base was created mainly as a response to the high incidence of check fraud at Wells Fargo & Co., BankAmerica Corp., and other western banks several years ago.
"California at that time was a hotbed of fraud," Mr. McNabb said.
He noted, however, that check fraud is a nationwide problem that costs banks and merchants up to $10 billion a year. "Banks have struggled to keep up with fraud, and that became the birth of the whole ... data base movement," Mr. McNabb said.
Primary Payment's data base contains information on more than 57 million checking accounts-about 28% of the U.S. total.
In the first six months of 1997, banks tapped the data base 198 million times. More than two million warnings were issued for reasons ranging from an account closing to previous fraudulent activity related to a particular account.
About 554,000 data base inquiries resulted in "hard hits," which indicate a high probability of fraud. These checks, valued at $230 million, generally were returned before payment was issued.
Mr. McNabb said he plans to promote the data base through alliances and marketing agreements with payments organizations such as the Bankers Roundtable and Payment Solutions Network Inc., a Dallas-based electronic check presentment network that is managed by Carreker-Antinori Inc. of Dallas.
Phyllis Meyerson, principal at the Electronic Check Clearing House Organization, a Dallas-based rulemaking body for electronic check presentment, said Mr. McNabb would be a boon to the anti-fraud effort because he has a "tremendous amount of credibility."
