The average point of sale transaction shrank last year as more small merchants started accepting cards, a new study shows.

The study, conducted by Faulkner & Gray Inc. for its 1998 Card Industry Directory, was based on information from 73 credit card merchant banks and the 12 banks that First Data Corp. serves. In all, these companies were involved in 6.7 billion point of sale transactions.

In 1996, the study said, the average point of sale card transaction for banks not allied with First Data came to $63.53, down from $68.08 in 1995.

The figures were higher for banks in the First Data alliance, but the trend was the same: The so-called ticket price slipped to $71.18 from $76.73.

Experts said other factors-including recurring payments, use of credit cards for purchases where cash was typically used, and rewards offered by cobranded programs-also contributed to the decline. .

"The average ticket price is going down because the industry is more successful at getting mom and pops," said Paul Martaus, president of Martaus & Associates in Clearwater, Fla.

"There used to be social mores against using credit cards. Now they are being used more and more as a payment vehicle."

Recurring payments-for billed services like Internet access or cable television-contribute millions of smaller sales, typically less than $50, to the mix.

Mr. Martaus said average sales were higher for the First Data banks because they are large regionals or superregionals and inherited the CES and Nabanco portfolios, which contained larger merchants.

David Robertson, president of The Nilson Report in Oxnard, Calif., said he "takes exception" to the Faulkner & Gray data.

Though there is "an inevitable correlation between reach for smaller merchants and a decline in average ticket sale," the average merchant ticket price for Visa and MasterCard transactions went up 1%, $73, in 1996.

One of the chief things that will affect ticket prices over the next five years, Mr. Robertson said, will be "commercial cards, which will push up the average price."

The average sale is "fairly high"-between $70 and $100-at Banc One Payment Services of Columbus, Ohio, said, chairman David Strider.

But he said the price size "has everything to do with sales strategy; it has nothing to do with an alliance partnership."

Most of his unit's customers are small and midsize merchants, Mr. Strider said. Banc One Corp. is a First Data customer.

A nonalliance bank processor with a higher-than-average merchant ticket is First Tennessee Bank in Memphis, which processes transactions primarily for hotels and motels. The bank contributed its data to the study.

Ronald R. Nation, president of First Tennessee Bank Merchant Services Inc., said its average ticket price for 1996 was $87, up from $81 a year earlier.

"Typically we do not go after smaller merchants," Mr. Nation said. "We have enough to do supporting the lodging industry. We won't rule it out in the future, but we want to be a top-five player if we concentrate on it."

He said the lodging industry will begin to see average ticket prices go down in the next few years because there is an oversupply of rooms.

Another nonalliance bank, KeyCorp in Cleveland, also reported that sales price figures were sloping gradually.

"Our portfolio average ticket is decreasing in line with the industry," said David R. Campbell, executive vice president of payment services. Mr. Campbell's unit processes for 60,000 merchants.

Mr. Campbell declined to say how big KeyCorp's average ticket is, but he did say it has been declining by $1 to $2 a year.

But Mr. Campbell attributed the phenomenon not to the addition of smaller merchants, but to the increased use of cobranded credit cards.

To get mileage or cash rebates from cobranded cards, he said, consumers are using credit cards at places where they traditionally used cash, like gas pumps, movie theaters, and convenience stores.

"The success of various cobranded programs is driving consumer behavior," Mr. Campbell said.

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