The electronic banking joint venture of CoreStates Financial Corp. and three other superregional institutions has chosen the MAC teller-machine network brand as its vehicle for a rollout across the Midwest, Mid-South, and Texas starting next year.
Executives at Electronic Payment Services Inc. - co-owned by CoreStates, Banc One Corp., PNC Financial Corp., and Society Corp. - added that they eventually want to take the MAC logo nationwide. The group expects to get Federal Reserve Board regulatory approval for the new company this December.
The executives said CoreStates' MAC automated teller machine system will eventually envelop the regional ATM network brands of the other three bank owners: including Pittsburgh-based PNC's Owl and Trinet, Banc One's Jubilee, and Society's Green Machine Network Corp.
Fast Debit Growth Seen
The officials also projected fast growth for the company's debit card point-of-sale business, in which consumers can use their ATM cards to make purchases.
Although the dates when the MAC network will be extended into various regions have not yet been decided, Electronic Payment Services executives said they plan to begin consolidating the co-owners' ATM networks under the MAC banner by the middle of 1993 and should complete the changeover by the end of 1994.
As an interim step, an electronic link among the banks' individual networks will enable 26 million ATM cardholders to use any ATM on the systems beginning early next year, said Donald J. Gleason, MAC network manager. Partner banks will then begin issuing cards with the MAC logo, along with their other logos.
In the long term, however, "the heart [of the network] will be the MAC platform," said Michael L. Douglas, who has been designated chief operating officer of Electronic Payment Services. Mr. Douglas also runs PNC's electronic banking unit.
The executives outlined the rollout schedule at the annual MAC users' conference in Philadelphia last week.
The officials stressed that the new company would have the resources to give its members new products - in particular, a new "smart card" that the company's MAC unit plans to roll out in mid-1993. The company expects to issue the cards with embedded computer chips to a few hundred bank customers on a trial basis next summer.
Mr. Douglas projected 10% to 15% annual increases in transactions for EPS in the ATM business in next few years, mainly by gains in market share and increased use by existing cardholders. He also predicted 20% to 30% annual growth in the number of debit card point-of-sale payments.
EPS executive declined to project revenues. The venture is starting with $200 million in capital.
Monitoring POS Expansion
Richard Speer, president of Speer & Associates, a consulting firm based in Atlanta, estimated that EPS would have a market capitalization of $800 million to $1.2 billion in three to four years, with revenues of $300 million to $400 million, and earnings of $30 million to $35 million.
But the main question will be how quickly EPS can expand its debit point-of-sale business, Mr. Speer said.
EPS expects rapid growth in POS. In the last 12 months, MAC's monthly POS transaction volume more than doubled, from 750,000 to 1.5 million, said Mr. Gleason.
EPS will expand from 600 employees to between 700 and 750 during the next year.
As part of the expansion, a new transaction-processing and switching facility will be built.