NYCE Corp. has purchased a small network of automated teller machines in Massachusetts, X-Press 24, from FleetBoston Financial Corp., the companies announced Monday.
The deal, which closed last week with no price disclosed, represents a further step in the consolidation of the electronic funds transfer business into the hands of a few big names. NYCE, of Woodcliff Lake, N.J., is the dominant network in the Northeast, and buying X-Press 24 was an opportunity to eliminate a competitor. X-Press 24 includes 116 ATMs belonging to 53 small financial institutions; under NYCEs ownership, the X-Press 24 logo will disappear eventually.
Its an attractive addition for us, said Dennis F. Lynch, president and chief executive officer of NYCE.
NYCE said it has agreed to honor the contracts FleetBoston holds with the 53 institutions. These contracts give customers of those institutions surcharge-free access to ATMs owned by Bank of Boston, one of the merger partners that created FleetBoston. When those contracts expire, each institution will decide whether to renew with NYCE.
For FleetBoston, the sale was a chance to unload a business that did not serve a majority of its customers and that the bank inherited from a 1996 merger partner, BayBanks. X-Press 24 was not considered part of FleetBostons ATM network of 3,500 machines in eight states, but customers of the 53 member institutions could go through the network for free use of 1,500 BankBoston ATMs in four states,
The business did not have critical mass, and wed rather focus on the ATM network that is essential to our customer base, said FleetBoston spokesman Bruce Spitzer.
In May, the ATMs belonging to the former BankBoston and Fleet Financial Group will officially merge, and under the agreement with NYCE, X-Press 24 customers will be able to withdraw surcharge-free money from Fleets 2,000 ATMs in addition to the BankBoston ATMs they already use. The combined FleetBostons 3,500 ATMs will be available to them in eight states from Maine to Delaware.
NYCE was an obvious choice for FleetBoston, which is one of the networks largest owners, and holds a seat on its board of directors. All X-Press 24 machines carry the NYCE logo, and 40 of the 53 X-Press 24 institutions have agreed to transfer their processing services from BankBoston to NYCE.
X-Press 24 represents the second acquisition for NYCE in a year. NYCE, which handles transactions for 35,500 ATMs, acquired Magic Line Inc. of Dearborn, Mich. last June, expanding its geographic territory westward.
The nations two other large regional shared networks have also been widening their reach. Star Systems Inc. became the first coast-to-coast regional network last year, when San Diego-based Star merged with Honor of Maitland, Fla. MAC, a division of Concord EFS of Memphis, agreed this month to buy Cash Station of Chicago.
The X-Press 24 acquisition, however, is not about geography. Mr. Lynch said the networks strength is in the point of sale market, which is NYCEs most rapidly growing product. The deal, he said, solidifies a market that had been fragmented for NYCE.
There wasnt sufficient added value or benefit to Fleet to maintain that brand when it could be used as a NYCE ATM already, said Michael Strada, an ATM consultant with Electronic Commerce Strategies Inc. of Atlanta.
