THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, March 14, 1995 TAG: 9503140278
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Long : 138 lines
They began appearing a decade ago in gas stations. Then in convenience stores and supermarkets.
By the end of 1996, terminals that accept payment by debit card will be in post offices throughout the country.
The U.S. Postal Service has awarded a contract to NationsBank Corp. to put the machines into 33,000 post offices. As part of this program, the Postal Service also will allow customers to pay for purchases with VISA and MasterCard credit cards.
The contract, which calls for installation of 50,000 terminals, has been greeted with delight by regional networks that link the electronic terminals and banks.
``This is tremendous because the Postal Service is so big and so visible,'' said Richard Lyons, executive vice president of Internet Inc., Reston-based parent of the MOST network. MOST ties together point-of-sale terminals and automated teller machines with banks in mid-Atlantic and Southeastern states.
The Postal Service contract ``puts a stamp of approval'' on the use of debit cards, said Tom Bennion, president and chief executive officer of Southeast Switch Inc., the Maitland, Fla., owner of the Honor network.
Many individuals using debit cards to withdraw cash from bank teller machines don't realize that the cards also can be used for routine purchases of gasoline, groceries and merchandise, he said.
The availability of point-of-sale terminals in post offices will broaden the exposure of electronic payments, Bennion predicted.
A debit card authorizes a point-of-sale terminal to deduct the amount of a purchase from a shopper's checking account. A central switching system immediately credits that amount to the retailer's bank account.
The terminals being installed in post offices are the size of a small desktop adding machine.
The Postal Service contract comes in the midst of a broad campaign by retailers to install the debit-card terminals. In mid-1994, 343,959 terminals were in use nationwide - more than double the 155,000 in place one year earlier and six times the number in 1990, according to the trade publication POS News.
MOST and Honor are among several regional networks whose debit cards will be accepted by the Postal Service terminals. Both networks worked with the Postal Service during a 20-month test of debit-card and credit-card purchases in the Washington, Orlando, Fla., and Dallas-Fort Worth areas.
Once its 50,000 terminals are installed, ``we will be the largest acceptor of debit cards anywhere,'' said Greg Frey, a Postal Service spokesman in Washington.
One reason for accepting debit-card and credit-card payments is the Postal Service's effort to reduce the cost of counting, verifying and transporting cash, said Frey. But more important is the customer convenience that the cards provide, he said.
The Postal Service estimates that its retail purchases totaled $3 billion last year.
NationsBank and a subcontractor, National Bancard Corp., are scheduled to begin installing the point-of-sale terminals in post offices next month. San Diego, Denver and Seattle will be the first areas to get the terminals, Frey said.
As part of their $45.8 million contract with the Postal Service, NationsBank and National Bancard will be responsible for processing and settling card transactions. In addition, the two companies will provide the Postal Service with training and other support services.
National Bancard will process post office card transactions at a facility in Florida, and few employees at NationsBank's card-processing facility in Norfolk will be involved in the contract, said O.B. Rawls, merchant division executive of NationsBank Card Services.
They began appearing a decade ago in gas stations. Then in convenience stores and supermarkets.
By the end of 1996, terminals that accept payment by debit card will be in post offices throughout the country.
The U.S. Postal Service has awarded a contract to NationsBank Corp. to put the machines into 33,000 post offices. As part of this program, the Postal Service also will allow customers to pay for purchases with VISA and MasterCard credit cards.
The contract, which calls for installation of 50,000 terminals, has been greeted with delight by regional networks that link the electronic terminals and banks.
``This is tremendous because the Postal Service is so big and so visible,'' said Richard Lyons, executive vice president of Internet Inc., Reston-based parent of the MOST network. MOST ties together point-of-sale terminals and automated teller machines with banks in mid-Atlantic and Southeastern states.
The Postal Service contract ``puts a stamp of approval'' on the use of debit cards, said Tom Bennion, president and chief executive officer of Southeast Switch Inc., the Maitland, Fla., owner of the Honor network.
Many individuals using debit cards to withdraw cash from bank teller machines don't realize that the cards also can be used for routine purchases of gasoline, groceries and merchandise, he said.
The availability of point-of-sale terminals in post offices will broaden the exposure of electronic payments, Bennion predicted.
A debit card authorizes a point-of-sale terminal to deduct the amount of a purchase from a shopper's checking account. A central switching system immediately credits that amount to the retailer's bank account.
The terminals being installed in post offices are the size of a small desktop adding machine.
The Postal Service contract comes in the midst of a broad campaign by retailers to install the debit-card terminals. In mid-1994, 343,959 terminals were in use nationwide - more than double the 155,000 in place one year earlier and six times the number in 1990, according to the trade publication POS News.
MOST and Honor are among several regional networks whose debit cards will be accepted by the Postal Service terminals. Both networks worked with the Postal Service during a 20-month test of debit-card and credit-card purchases in the Washington, Orlando, Fla., and Dallas-Fort Worth areas.
Once its 50,000 terminals are installed, ``we will be the largest acceptor of debit cards anywhere,'' said Greg Frey, a Postal Service spokesman in Washington.
One reason for accepting debit-card and credit-card payments is the Postal Service's effort to reduce the cost of counting, verifying and transporting cash, said Frey. But more important is the customer convenience that the cards provide, he said.
The Postal Service estimates that its retail purchases totaled $3 billion last year.
NationsBank and a subcontractor, National Bancard Corp., are scheduled to begin installing the point-of-sale terminals in post offices next month. San Diego, Denver and Seattle will be the first areas to get the terminals, Frey said.
As part of their $45.8 million contract with the Postal Service, NationsBank and National Bancard will be responsible for processing and settling card transactions. In addition, the two companies will provide the Postal Service with training and other support services.
National Bancard will process post office card transactions at a facility in Florida, and few employees at NationsBank's card-processing facility in Norfolk will be involved in the contract, said O.B. Rawls, merchant division executive of NationsBank Card Services. ILLUSTRATION: Color graphic by Robertt D. Voros, Staff
Research by Tom Shean
Photo
The terminals that will be installed in post offices are about the
size of a small desktop adding machine.
by CNB