Mellon Has Deal to Acquire An ATM Business from Fleet
A technology division of Mellon Bank Corp. announced last week that it is buying a small ATM processing business from Fleet/Norstar Financial Corp.
Under the agreement, Mellon's Network Services division will process teller-machine transaction data for 29 financial institutions that were formerly the customers of the Connecticut Bank and Trust Co. CBT, once a unit of the failed Bank of New England, was merged with Fleet Bank of Connecticut on July 15 to form Fleet Bank.
The conversion will involve 24 teller-machine terminals that generate an estimated 200,000 transactions per month.
The move is part of the $48 billion-asset Fleet's plans to pare away businesses it deems unnecessary or redundant in light of its acquisition of the failed Bank of New England from the Federal Deposit Insurance Corp. That acquisition was officially completed July 15.
"Processing ATM transactions for correspondent banks is not a vital business for us," said Richard J. DeNoia, a spokesman for Fleet Bank. "We feel some of our other services demand more attention." He said the bank will continue to participate in correspondent bank operations in a number of other areas, including cash-letter and wire-transfer processing.
Data Network Pact with AT&T
The agreement with Pittsburgh-based Mellon marks second major cost-cutting move since Fleet officially acquired the Bank of New England two weeks ago.
Fleet, based in Providence, R.I., has an agreement for American Telephone and Telegraph Co. to set up a satellite-based data network that Fleet executives said will cut communications costs by $5 million.
Bank officials declined to estimate either the cost savings or the purchase price of the deal.
By November, Mellon officials said, they expect to have all 29 correspondent banks up and running on Mellon Network Services' systems.
Banks to Be Linked to Networks
Mellon will handle the full range of ATM transaction processing for these banks, including authorizing identification numbers and updating customer accounts after each transaction.
In addition, Mellon Network Services' computers will link the banks - all of which are in New England - to the regional and national teller-machine networks as required. Mellon officials said they expect no interruption of service to result.
"The fact that we've [already] got a large transaction-processing presence in New England allows Fleet to sell the business knowing the banks will get the proper attention," said Janet Hartung, senior vice president and head of Mellon's Network Services division.
Mellon provides ATM processing services to about 500 financial institutions, and roughly 300 of these are in New England.
Also, Ms. Hartung said, Mellon links more banks to Yankee 24 - the dominant New England ATM network - than any other third-party processor.