Wal-Mart Stores Inc. has widened its embrace of on-line debit, equipping more stores to accept NYCE Corp. automated teller machine cards.

Wal-Mart, the nation's leading retailer, has accepted NYCE and other on- line debit cards for years at certain stores but until recently had not done so in NYCE's primary markets in the Northeast. This month, it equipped 150 more stores with the necessary pinpads, bringing the number of Wal- Marts with on-line debit capabilities to 1,425, according to NYCE.

"We have equipped all of our stores in their market to accept NYCE, which will certainly promote their card more," said Kathy Schimmel, manager of financial operations for the Bentonville, Ark., retailer.

Promoting on-line debit is a priority for Wal-Mart, which in 1996 challenged in a lawsuit the debit card pricing policies of Visa U.S.A. and MasterCard International. The suit became a class action, with The Limited Inc., Sears, Roebuck and Co., and Burlington Coat Factory Warehouse Corp., among others, agreeing with Wal-Mart that they should have some discretion to refuse the off-line debit products Visa Check and MasterMoney.

While the card associations' rules require equal treatment and acceptance of off-line debit and standard credit cards, the retailers complained that they were being squeezed by the high interchange fees on off-line debit transactions.

Lloyd Constantine, a lawyer representing Wal-Mart, called the NYCE announcement "an indication that Wal-Mart is going to increase its emphasis" on on-line debit as it pursues its lawsuit.

The litigation is now in a "very heavy discovery phase," and no court dates are scheduled for a while, said Mr. Constantine, whose New York law firm is Constantine & Partners. A court-ordered settlement conference is set for Dec. 15, 1998.

Wal-Mart and other retailers are forbidden to ask that customers use one payment form over another, but Wal-Mart is heavily advertising on-line debit cards in its stores, said Susan Zawodniak, vice president and executive director of NYCE, Woodcliff Lake, N.J.

"We think it's extremely significant any time you have a retailer of Wal-Mart's stature not only accepting on-line debit but promoting NYCE," Ms. Zawodniak said.

Wal-Mart is "putting banners up and placing cards near the terminals that say, 'NYCE accepted here for purchase,'" she said.

The promotions have paid off for NYCE, Ms. Zawodniak said. In November, before the additional stores were equipped, Wal-Mart handled 820 on-line debit transactions during a peak hour, she said. A week after the equipment was installed, the retailer handled 3,500 such transactions in a peak hour, she said.

Ms. Schimmel of Wal-Mart said NYCE is one of 12 "on-line networks we currently accept."

Wal-Mart prefers on-line debit transactions, Ms. Schimmel said, because they are "more secure for the customer" and "allow the customer to have cash back."

They are also less expensive for Wal-Mart. "Instead of an interchange percentage," as with off-line, she said, "you're charged a flat rate based on the network."

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