Mellon, N.Y. Port Authority in Card Deal

Bank Will Process Payments Made for Parking at Agency's Airports

Mellon Bank has signed an agreement with the Port Authority of New York and New Jersey to process payments made by credit card for parking at the agency's airports.

The program, to begin next month, will be the largest bank card acceptance program for airport parking. It is part of a $35 million revamping of the Port Authority's system of revenue collection.

"From an audit perspective, the new system provides tighter controls," ensuring that customers are charged and pay the right amount, said Curtis Dennis, program manager for airport terminal services at the Port Authority.

Other Areas Targeted

Parking lots - along with fastfood restaurants, movie theaters, and toll roads - are among the areas targeted by MasterCard and Visa in the past year with special services designed to get customers through lines quickly while reducing the risks of fraud and other costs associated with handling cash.

The deal is Mellon's first to do processing for an airport authority. "The card associations are opening up new markets, and this is one of the first to take off," said Nancie N. Lynch, assistant vice president at Mellon.

"The Port Authority is looking for ways to cut expenses and move people through as quickly as possible, so we're making the payment mechanism more efficient," said Robert S. Newman, vice president of technology development, new markets, at MasterCard.

10 Million Cars a Year

Sources close to the project said that Port Authority garnered $80 million in 1990 from fees charged in the parking lots and garages at the three metropolitan airports, Newark International, LaGuardia, and Kennedy International. Port Authority officials declined to confirm the figure. About 10 million cars are parked in the lots each year.

If bank cards can ultimately account for 25% of all volume, the Port Authority's recovery of losses from cash handling would be greater than the cost of the entire system, people working on the project said.

The Port Authority will use a system of rapid verification, in which "negative files" on bad credit cards are kept in the agency's central computer. When a customer uses a credit card, the account number is checked against the file.

If the account number is not on the file, the payment is authorized for sums under $75. For sums over that amount, Visa U.S.A. or MasterCard International are called for on-line authorization, as is done under normal verification procedures.

Machines for prepaying parking fees will be installed near the baggage pickup inside airports. Customers can use either cash or credit cards at the machines, which are linked to a fault-tolerant computer from Tandem Computers Inc. in the agency's data center at LaGuardia Airport.

Prepaid Tickets Verified

When leaving the parking lot, the customer hands the prepaid ticket to an attendant, who verifies the amount paid at a computer inside the booth, also linked to the main computer. A customer who has not prepaid can pay at the exit lane using cash or a credit card in a machine at the side of the attendant's kiosk.

The Tandem computer in the Port Authority data center will collect all the information from the airports and transfer it in batches at the end of the day to Mellon for processing. Mellon will transmit funds to the Port Authority the following day.

Nynex Information Solutions Inc. is providing systems integration services for the project, and Trindel America, Atlanta, is supplying ticketing hardware.

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