Infinet Payment Services Inc. this week unveiled a new set of operating rules that contain several significant departures from the electronic banking network's past procedures.
Infinet, which was formed last year when the NYCE and Yankee 24 automated teller machine networks merged, had long been grappling with the problem of integrating their two very different sets of rules.
"Generally speaking, when you put two organizations together, you're bound to encounter differences in the way things get done," said Richard P. Yanak, president and chief executive of the superregional network that covers the Northeast. "We think the new Infinet operating rules take the best from both NYCE and Yankee 24."
In remarks to those at the first Infinet member conference last month, Mr. Yanak emphasized the company's desire to help its member institutions find new ways to extend the use and profits of their electronic banking activities.
"We are not through with finding ways to serve you better," he said to the 600-plus assembled bankers. "We will aggressively pursue new products, services, and procedures - all with the intent of giving you more transactions and more profits."
To this end, Infinet has adopted an issuer-directed routing policy, which allows the card issuer to choose the network through which a transactions is processed.
In the past, some issuing members could request a particular routing method, but the terminal owner had to agree. That no longer applies.
"This is the most rational, free-market approach," said Mr. Yanak. "We think the buyer ought to be allowed to make the determination of what to buy and how much it's worth. So issuer-directed routing really makes the most sense."
Maximizing members' profits is a stated mission of the network, said Mr. Yanak, and to that end NYCE will now allow convenience surcharges under certain circumstances.
The new rules allow NYCE terminal owners to levy a fee on withdrawal transactions, but it must be on a nondiscriminatory basis. For example, the ATM owner could not charge an Infinet cardholder if it does not also charge others.
"If you participate in a national network and cannot surcharge because of its rules, you cannot surcharge a NYCE cardholder either," explained Richard Symington, Infinet's operations director.
The two national interchange networks - Visa's Plus and MasterCard's Cirrus - prohibit member surcharges for ATM use, unless they have units in any of the eight states that have passed legislation preempting that ban.
The eight states that currently allow ATM surcharging are Alabama, Georgia, Idaho, Louisiana, Maine, Mississippi, Nevada, and Utah.
Spokeswomen for the national networks said they had no plan to change the surcharging policies.
Effectively, then, few Infinet members will be in a position to surcharge, said industry consultants, since most also belong to either Cirrus or Plus.
Mr. Yanak pointed out that owners of his network's 388 ATMs in Maine could assess the charges, because of the state override.
"I know some of them do, especially those in the big tourist areas along the coast," he said. "But I don't think a great many of our members are in a position to take advantage of this rule."
Nevertheless, if Visa or MasterCard should decide to relax their rules, NYCE members could assess the charges immediately, pointed out an industry consultant. He suggested that Infinet is probably setting its members up for such a possibility.