To the Editor:
In a recent Viewpoints article ["
He also points out that for the first time in our industry's history over "50% of all EFT activity" is controlled by companies that are not financial institutions, which opens the way for public companies to put profits before service to customers.
I agree with much of what Mr. D'Ottavio had to say, but I take issue with the bleak picture he paints of today's environment and with his advice to seek only better pricing. Also, I think he ignores a very solid economic principle: that larger financial institutions with high volumes should be able to share in the economies of scale produced by their volume by receiving lower prices.
As a founder of the MAC network, which he remembers so nostalgically, I can assure him that profits, even then, were certainly a motive driving the network's expansion. This motive was always balanced by a philosophy that service and the introduction of new products to customers was the best way to produce those profits.
That is why our network was the first to offer point of sale services in the petroleum and supermarket industries. This philosophy remained the underpinning of the network's growth until the founders of the network were gradually eased out to make way for its sale to a public company.
Unfortunately, that sale and a string of other industry consolidations involving public companies have changed the face of EFT, but alternatives do exist.
Not every processor is publicly held, and not every processor believes the road to profit is paved by exorbitant transaction fees and surcharges. While I may not be able to offer bank-to-bank services as of old, I still firmly believe that customer service and new products pave the route to success.
Today I run a company that is filled with many of the same people whose philosophy Mr. D'Ottavio so kindly praises. Genpass is just one of several EFT processors that are privately owned, jointly owned by institutions, or are still under one institution's banner. These companies offer attractive pricing options and still see customer service as the road to success.
Mr. D'Ottavio's "Viewpoint" is thoughtful, and I do hope that every institution will do precisely what he advises and carefully examine its current contracts, then shop not only for better prices, but also for better service and products that add value for its customers. After all, in the end it is the consumer who determines the selection by demanding convenience, functionality, service, and fair pricing in trade for product loyalty.
