ERIC BELL Vice president First Interstate Bancorp. Los Angeles

THE NUMBER ONE TASK is education.

Then comes integration, pricing debit appropriately and making it easy to use.

Educate merchants to the advantages of using debit. The biggest incentive is that customers like to use them. We can also demonstrate how it will reduce the cash handling charges. The funds are guaranteed and you get a faster recipt of payment than with checks. Studies have shown that consumers spend more with the cards than when using cash alone. The merchant needs to be shown how they can garner all these benefits relatively inexpensively.

Once they understand it, make it easy for them to get started. Make sure you price it attractively. Provide the training and the installation support. Set it up so they can use the same processor, so they can integrate the debit activity on a single statement. Provide them with tracking.

If you walk through the merchant's door without the appropriate field support, why is the merchant going to upset the apple cart and start a program? We must overcome the inertia.

MICHAEL SHADE Director of marketing and planning Verifone Inc. Redwood City, Calif.

FIRST, EDUCATE THE MERCHANT. Because of the way debit has grown up, we as an industry have sent mixed signals. The merchants are confused.

According to research we jointly sponsored with others, a majority of 1,200 merchants surveyed said no one told them what debit was. And if they had, they would sign up. Once merchants understand it, we are more than halfway there.

Part of the resistance has been due to conflicts in the industry. Merchants with terminals have relationships with the credit card acquiring side of the bank. Until quite recently, those people were not even thinking of debit. They were thinking of credit cards. Someone has to bring the retail banking organization together with the credit card people, who already own the relationship with the merchants.

It is not the role of ATM network service providers to be out there banging on merchants' doors. The banks should be bringing the merchants to the network.

GARY BAUER Vice president Bank One Arizona Phoenix

FIRST AND FOREMOST is merchant education. There is no other way to increase acceptance. To get them to accept debit cards we must show them what they are going to get from them. It is a combination of direct selling and marketing to the existing merchant base.

There are obvious benefits. It reduces the cost of handling cash. It increase customer payment options. Unlike checks, merchants are guaranteed payments. There is no fear of getting a returned check back.

Another key element that bankers should be telling merchants is that customers usually spend more with debit cards than with cash sales.

Merchants will also be able to attract customers from other markets. That is a key component in Arizona where we get a lot of winter snowbirds.

So far it hasn't been a focused product. But along with the smart card, more and more people will be walking around with debit cards looking for merchants with the debit sign in the window. Competitive pressures will get more merchants to sign up. Customers will be asking for this option. Merchants are going to train customers and customers are going to train merchants.

WILLIAM WESTERVELT Principal First Annapolis Consulting Annapolis, Md.

THERE ARE THREE THINGS that banks ought to do to increase merchant acceptance of debit cards.

Number one is organizational. Wherever banks have the acquiring business for credit cards housed, that is where the debit acquiring business should be housed. The merchant wants a single solution, they don't want to be sold by two different areas of the bank. The people responsible for acquiring credit cards should also be responsible for debit.

Secondly, cash management personnel and calling officers need to understand debit. Focus on a couple of vertical markets, supermarkets being one obvious choice.

Third, the traditional distribution points for merchant credit cards ought to leverage debit cards. Merchants who accept credit cards should be as interested in debit cards.

ARTHUR D. KRANZLEY Senior vice president MasterCard International New York, N.Y.

RETAILERS TODAY ARE INTERESTED in payment services that are convenient and easy for their customers, that increase sales, and that improve overall efficiency at the point of purchase. Issuers can make on-line debit acceptance more attractive to merchants by adding point-of-sale capability to all their automated teller machine cards and by educating their customers about the POS use and service linked to their cards.

Local and national consumer education, such as MasterCard's Shopping With Your ATM Card cooperative effort with the U.S. Department of Agriculture, can help to make consumers comfortable with POS debit. Issuers can also help by stimulating consumer usage by informing their ATM cardholders where their cards are accepted and by supporting local integrated marketing efforts as well as cardholder activation and usage programs for ATM cards.

LAURIE TOTH Vice president Mellon Bank Corp. Pittsburgh

INCREASING DEBIT ACCEPTANCE takes a joint effort of the card associations, networks, financial institutions, and processors.

In a sense, the financial institution should work as a consultant with the merchant. For example, at Mellon we have worked with Giant Eagle, a large supermarket chain in western Pennsylvania and Ohio, to develop a three-tier debit acceptance program. Along with the card association and the network, we've developed an employee incentive program to get the employees to use the debit card. Those using the card receive dollar-off coupons and a chance to enter a travel sweepstakes.

We also worked with the Mac network to develop merchandising promotions for the store, such as danglers and other point of sale signage. Then we offered incentives to the cashiers at the checkout lane to increase acceptance of debit payments.

Banks should make sure they take advantage of what MasterCard and Visa are offering, such as brochures, videos and training programs. Leverage their relationships with the processors as well.

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