Like a postmaster general announcing a higher price for stamps, or a dairy farmer charging more for milk, the head of the Pulse electronic banking network has learned what it takes to sell an unpopular cause.
Championing the notion of automated teller machine surcharges, Stan Paur is fighting an army of consumer advocates and the chairman of the Senate Banking Committee, Alfonse M. D'Amato.
Mr. Paur, president and chief executive officer of Houston-based Pulse EFT Association, one of the top six regional networks, has not only a knack for rhetoric but the data to back it up. He does his best to make ATM fees sound as American as apple pie.
"We can correct some misinformation about some of these fees," Mr. Paur said. "And certainly we can provide empirical data that puts this whole issue in a much different context than the consumer groups."
"The remarkable thing is how few consumers are really affected," he stated. "Seventy percent have never paid this kind of fee. People who don't want to pay it, they will go to their own institution or use cash back"- getting excess cash at the supermarket checkout lane.
Mr. Paur has come a long way from selling computer hardware in the 1960s and 1970s. In the politically charged atmosphere surrounding ATM fees-Sen. D'Amato, a New York Republican, seems to want to ride his surcharge- prohibition bill to reelection in the fall-Mr. Paur wants to reassure financial institutions that it is all right to make some money.
He would prefer no legislative solution. He advises machine owners that they have alternatives, such as waiving fees for their best customers.
"One credit union told me they had a customer come in and complain about paying fees," Mr. Paur said. "They looked in the guy's account-one of their best customers-and what he was really talking about was just $2 a month."
Mr. Paur, 54, is something of an institution in ATM networking, the longest-serving CEO among his peers and a leader in their trade group. He just stepped down after 11 years as head of the Electronic Funds Transfer Association's network executives council, which he helped organize as the Shared Network Executives Association.
His visibility increased as the ATM-surcharge battle heated up and required his lobbying attentions in Washington.
"You'd think he was inside the Beltway the way he understands the system," said H. Kurt Helwig, executive director of the EFT Association, of Mr. Paur. "He brings data. He is not just talking out of his hat. That plays well on the Hill."
Mr. Paur said the industry has been "remiss" in consumer education. Pulse has developed a series of statement inserts for its member institutions. One gives customers tips on avoiding surcharges. Another Pulse handout compares surcharges to other fees people take for granted, such as airport parking, sodas from vending machines, and telephone calls in hotel rooms.
The data Pulse has culled and shared with other networks comes from numerous studies, some that the southwestern network itself commissioned. One study of Texas cardholders conducted last year by a Pulse board member found that 60% of the surcharges collected came from 18% of the cardholders. Seven out of 10 had never paid a surcharge, many because they purposely avoided them.
"Stan recognized institutions were taking lumps in the media," said Alanna Kellogg, a consultant and president of the Kellogg Group, St. Louis. "Stan stood up and said, 'Hey, wait a minute.'"
Their activism and information contributions have brought Mr. Paur and Pulse an industrywide following. People from outside Pulse's eight-state region attend its annual conferences and have seen for themselves that Mr. Paur is no shrinking violet.
Always aiming to open his annual meetings with an attention-getting gesture, Mr. Paur once co-starred with Future Money Man-a Pulse creation- somersaulting through fog and lasers on stage.
Among his personal goals is to play all 100 of the world's top golf courses. He is up to 38.
For all the flamboyance and high-profile political wrangling, Mr. Paur does not lose sight of the basics-the need to build volume to survive.
"Switching and settlement is going to become increasingly a commodity business," Mr. Paur said in a recent interview. The key question is, "Who can provide quality service at the lowest cost?"
So, though he soapboxes for surcharges that opponents claim are too high, he emphasizes the low costs that Pulse's nonprofit structure delivers to its more than 2,000 financial institutions.
The standard fee for a transaction through the network's central switch is 4.5 cents. Because of rebates totaling $2.5 million last year, based on switch volume, the effective cost was 2.9 cents. Mr. Paur sees that coming down to 2.7 cents this year.
For comparison, the Honor network in the Southeast charges tiered rates: 8.75 cents each for up to 500,000 transactions, dropping to 2.75 cents at volumes exceeding five million.
"The challenge is to continually strive to bring value to the industry, to lower the costs and help it make profits," Mr. Paur said.
Though Pulse has mainly focused on internal expansion, it has done a small amount of empire-building. In 1997, it bought Louisiana-based Gulfnet Inc.
Pulse was in the thick of pricing controversies long before the current one. Mr. Paur originally encountered the consequences of surcharging in a 1980s dispute with the defunct First Texas Savings Association.
The network wanted to lower interchange fees-those that member institutions pay each other to accept transactions. In an arbitration proceeding overseen by a former Justice Department antitrust chief, Thomas Kauper, Pulse was allowed to lower the rates but it had to allow First Texas to surcharge customers.
Mr. Paur recalled that he then viewed surcharges as "a doomsday scenario ... We thought we'd be out of business. We thought machine deployment would stop and everybody would route traffic around us."
But once the surcharge seed was planted, machine deployments and transaction volumes blossomed, a welcome and unanticipated consequence. "You have to be very cautious about what you think is going to happen when changes are made," Mr. Paur said.
He learned the ATM business from the ground up. After earning an English degree from St. Louis University in 1967, Mr. Paur went to work as a Honeywell Inc. computer salesman.
In 1971 he joined Diebold Inc., which a few years later would become the premier ATM manufacturer. Mr. Paur can still rattle off the first sales pitch he made for a drive-in banking system-how customers could reach out the window "with a natural arm bend."
When he saw the first Diebold ATMs at the company's Canton, Ohio, base, "I thought that was the dumbest idea I ever heard,'" Mr. Paur said with a laugh.
Soon he was selling the machines in southern Illinois, then in Houston. In 1982, two years after he left Diebold to work as an independent consultant, Mr. Paur was tapped by the directors of Pulse-then a group of Texas bankers-to head the new network.
It was a lonely occupation when much of the public was suspicious of banks' motives in installing the machines.
"Whenever you went to a cocktail party you were kind of reluctant to tell people where you worked," Mr. Paur said. In contrast to today, when people say they can't live without ATMs, he recalled that "if you said you worked for Pulse, you were always prepared to get hammered."
