As many regional ATM networks brace for sweeping change and consolidation in the industry, Star System Inc. is boldly doing what others wouldn't dream of: maintaining the status quo.
"Our strategy is to do just what we've been doing," said Ronald V. Congemi, president of San Diego-based Star.
The former Visa International executive sounds particularly stoic in the wake of a recent move by four superregionals to pool their resources in a bid for leadership in the electronic banking industry.
The consolidation sent shock waves through the industry because it was perceived to be the first in a series of such mergers that could lower membership fees and toughen competition.
No Merger Plans
But even as industry analysts expect more regional networks to be taken over by leaner and meaner entities, Star, which now averages 24 million transactions a month, contends that it won't be one of them.
"Those things are constantly under consideration, but we have no such merger plans," Mr. Congemi said.
Star doesn't expect the new network giant - known as Electronic Payment Services Inc. - to cut into its profits because the merged entity is in the East and out of Star's immediate market.
As other networks slog through saturated markets, Star's survival plan is to continue riding the upswing in the point-of-sale market.
Leader of the Pack
Star is the largest regional network, with 13,283 machines and a 77.6 million card base. It services the 8,550 branches of its 702 members and affiliates. On the point-of-sale side, Star's Explore service boasts 9.5 million cardholders.
Even in a sluggish economy, Star sees plenty of room to grow. The firm projects that its POS volume will continue to grow through 1993. Since January, Star has realized a 65% growth rate in point-of-sale transactions. And the prospects look even brighter, he said.
"Point of sale will in 1993 become a more influential part of our core business," Mr. Congemi said. He estimates that the POS market, which now accounts for 14% of Star's business, will swell to at least 18% next year.
To accomplish this, Star is expanding and testing new waters. "We're still adding major card bases between now and January and major retailer bases that will certainly allow that rate to continue throughout 1993."
To ensure success in these new bases, Star's strategy is to do what Mr. Congemi says the firm has done for years: provide high-quality, reliable electronic services designed to increase revenue for member institutions and enhance relationships among banks.
This may sound like a common claim by ATM networks, but Mr. Congemi has the hard data to prove it. Each year since 1986, Star has hired an outside firm to randomly survey its performance.
But Star's more-of-the-same strategy doesn't mean that it plans to sit back and risk losing its edge.
"We're constantly reassessing our position in the industry, but we will continue to do what we've done in the past because it's been very productive for our membership," Mr. Congemi said.
Looking ahead, Star plans to make a greater effort to diversify its business next year by expanding into other areas of payment. Mr. Congemi would not discuss which areas Star will look into, but industry analysts say emerging areas include medical payments, government benefits, and ticketing at airports and other transportation facilities.
Ironically, Star's mushrooming growth rate has also presented the greatest challenge: maintaining high levels of performance.
"We've had astronomical growth rates, and maintaining high performance and managing growth has been one of the hardest things to do," Mr. Congemi said.
A Lean Staff
He credits the efficiency of Star's core staff of 20. The system has the lowest ratio of employees to monthly transaction volume of any network in the country.
"The staff is the strength of the organization," he said.
Consumer education is also on the drawing board. Star plans to provide in-depth employee training to increase awareness of both ATM and point-of-sale markets.