Deeper penetration of existing markets is Shazam's strategy.

To achieve this goal, the Des Moinesbased regional ATM network is busily adding institutions to its member base. And it's introducing new products and services, which make Shazam more valuable to its members while also diversifying its revenue stream.

"We felt there would be some slowdown in business this year, considering everything we see and hear. But there hasn't been any," said Dale Dooley, chief executive of the network. "We are having a great year."

In its 13-state market, Shazam is busily adding three to four institutions per month.

"The smaller banks are just getting into EFT," noted Mr. Dooley.

About 660 Members

The additions have brought Shazam's membership to about 660 institutions. Since July, the network has converted 125 ATMs. Shazam has been credited with 4.5 million transactions monthly in 1991, and Mr. Dooley expects the increase in ATMs to add significantly to this level.

Shazam built a new building this year, and staff has risen from 73 to 112 during the past two years.

Even with the successful addition of institutions in existing markets, Mr. Dooley is not making geographic expansion a priority.

"We want to concentrate more on expanding products and services in areas where Shazam already has a presence," he said.

For example, Shazam is actively pushing use of ATM cards at the point of sale. In its five core states (Iowa, Minnesota, Missouri, Illinois, and Arkansas), Shazam officials believe the grocery store POS market is saturated. The company is now reaching out to expand use of POS in convenience stores.

To diversify its revenue stream, Shazam has signed outsourcing contracts with some banks that no longer want to handle data processing of their POS transactions.

"They're giving us more of their POS transactions and such, anything they're not making money on that's driving up their costs," he said.

Cash Letter Transmission

Recently, Shazam introduced a cash letter transmission service to financial institutions. Cash letter transmission is electronic transmission of information regarding transactions that go through the Federal Reserve. With this service, banks can get a jump on the day's business by bringing records current the night before.

Shazam is also investigating electronic payment of medical claims as a longer-term strategy.

Right now, he said, Shazam's success depends on the survival of its banks. "And their success depends a lot on the technology they take advantage of."

And that's what Shazam does best, said Mr. Dooley.

"We provide them with technology," he said. "If we work together, they will be successful and so will we."

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