Telecommunication is offering a hefty rebate and promising lower basic pricing for electronic messaging. In an address to Swift members at a conference last week, chief executive Leonard H. Schrank said the rebate would be at least 20% of total fees banks paid during the first six months of 1995. Another rebate may be possible later in the year, he noted. This month, Mr. Schrank added, Swift will release new pricing that he said will be "highly competitive." An informal conference theme among Swift staff has been what they term "cherry picking." They are worried that low-cost data transmission competitors are trying to take away some of Swift's traffic over heavily used routes, or are offering lower prices for messaging that doesn't require strong data security. As an institution owned by bank members, Swift walks a fine line in setting prices to meet competition and keep all the participants happy. "It's a challenge," said Eric C. Chilton, Swift's chairman, "because every member has a different position and a different market share." In his conference address, Mr. Chilton acknowledged the competitive pressures. "A cooperative company has a unique opportunity to exploit its potential. Having members as customers gives it a strong captive market," he said. "Owners should always be reluctant to seek alternative service providers and are only likely to do so because of price, unacceptable performance, loss of competitive advantage, or the threat of disintermediation." Responding to questions about Swift's pricing, the two executives said member costs have declined 45% since they took leadership of the organization three years ago. "Our costs are very small in relationship to the whole cost of cross- border payment," said Mr. Chilton. "We should price equal to or less than the market," adding that many banks that had moved traffic to private networks or other service providers are now returning to Swift.

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