Keycorp, National City Get Go-Ahead From the Fed for 20% Stakes in MAC

The Federal Reserve Board has approved two applications regarding equity ownership in Electronic Payment Services Inc., operator of one of the country's most prominent automated teller machine networks.

The Fed approved National City Corp.'s application to buy a 20% stake in EPS and Keycorp's plan to increase its ownership share to 20% from 7%.

EPS officials said the announcement should put to rest concerns about the Wilmington, Del.-based company, whose MAC network connects 16,500 ATMs and ranks first among regional networks in transactions processed through its central switch.

"Keycorp's increased participation, particularly since it was already very familiar with the organization, is great news," said an EPS spokeswoman.

National City, Cleveland, was to pay about $43 million for its share in EPS. The bank has 1.2 million cardholders, 900 ATMs, and 40,000 point of sale terminals.

Keycorp, also based in Cleveland, was to pay $31.6 million to increase its stake and will transfer its remaining ATMs and processing to the MAC network. As a result, Keycorp's 1.9 million ATM cards and 1,423 ATMs throughout 14 states will bear the MAC logo.

EPS now has five equity owners, each with a 20% share: National City, Keycorp, Banc One Corp., CoreStates Financial Corp., and PNC Bank Corp.

EPS continues to be interested in adding as many as four more owners in the next two years.

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