TCF Bank Minnesota and Cub Foods. a 24-hour discount food store. are introducing a cash-card point-of-sale system that will allow 511,000 TCF checking customers to pay for groceries with their automated teller machine cards.

Customers will be able to use their existing TCF Express Teller cards to pay for purchases at all Cub Foods stores in the Minneapolis, St Paul. and St. Cloud, Minn., areas.

The service will be launched Wednesday at a Cub Foods store in Maple Grove. Eighteen other Cub Foods stores will roll out the program by Aug. 1, and additional banks and retailers are expected to join the system later this summer.

Cub Foods, a subsidiary of Minneapolis-based Supervalu Inc., is installing equipment for each check-out line, and training personnel to handle Express Teller purchases.

Free to Customers

TCF Bank, a subsidiary of $ 5 billion-asset TCF Financial Corp., will manage the payment system, including the debiting of customers' checking accounts, and will provide the service to customers free of charge.

From the customer's point of view, the transaction process at the check-out counter will be similar to an ATM transaction. The customer will slide an Express Teller card through a card reader, and enter a code. The purchase amount will be deducted from the customer's checking account. Customers will also be able to request up to $25 in cash.

The customer will receive a receipt at the point of sale, and the purchase will appear on the monthly bank statement.

"Cash-card payments benefit both Cub Foods and its customers." said Gordy Farrington, Cub Foods vice president, Minnesota region. "Making a purchase with a cash card is 30 seconds faster than writing a check, and it simplifies the recordkeeping for the customer."

Cards from additional banks are expected to be put on the system in September, added Mr. Farrington.

According to Dan Engel, vice president and network director at TCF Bank, 33 other financial institutions issue Express Teller cards, including Twin City Coops Federal Credit Union, based in Minneapolis, and Richfield Bank and Trust Co. Mr. Engel said TCF is extending offers to participate to Norwest and First Bank System, Minneapolis, which issue their own ATM cards.

Once other banks sign up for the program, Cub Foods will begin the computer routing configuration necessary for the institutions to use the system, said company officials.

TFC Bank operates one of the largest ATM networks in the state, handling 3 million transactions monthly on more than 450 ATMs. The program is being introduced because it's an economical way for transactions to be processed, said Mr. Engel. "Minnesota is one of the few areas in the country that doesn't have a point-of-sale system for ATM cards," he said.

One reason is that in most other major cities a single cashcard system dominates. Minnesota, on the other hand, has three regional ATM networks, so there has been no common effort in the development of point-of-sale, explained Mr. Engel.

In addition, more merchants in the Twin Cities accept personal checks than in other major urban markets, he said.

TCF Bank has had a relationship with Cub Foods since 1988, when the bank began to establish branches in the stores.

Cub Foods operates 110 stores in 13 states. Of the bank's 133 community branches, 27 are located in Cub Foods stores in Minnesota and Illinois.

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