MasterCard Plans Point-of-Sale Product For Merchants Leery..., 1984 WLNR 181898
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`4/6/84 Am. Banker 3
`1984 WLNR 181898
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`American Banker (USA)
`Copyright (c) 1984 American Banker, Inc.
`
`April 6, 1984
`
`MasterCard Plans Point-of-Sale Product For Merchants Leery of Bank Cards
`
`By MICHAEL WEINSTEIN
`
`MasterCard International Inc. is developing a new point-of-sale product designed for merchants who traditionally refuse to
`accept bank cards.
`
`This is the latest of several moves by MasterCard to offer point-of-sale services. With this new product, the bank card
`organization is taking advantage of the renewed interest in direct-debit, point-of-sale systems.
`
`MasterCard will offer a branded logo specifically for the new service to be used on banks' proprietary debit cards, said F. Alan
`Schultheis, senior vice president of marketing and product development at MasterCard.
`
`The service, which MasterCard expects to be operational by the end of the year, is aimed at such merchants as supermarkets
`and oil companies, Mr. Schultheis said. It will be made available to MasterCard's member banks, which will market the product
`to retailers.
`
`The service, still unnamed, will not be readily identifiable as a MasterCard product to avoid comparisons with MasterCard's
`traditional bank card products, Mr. Schultheis said in an interview at the Electronic Funds Transfer Association's annual
`conference in Orlando, Fla., this week.
`
`The bank card organization will provide the data processing support for the new product. And the new product will carry no
`interchange fee, which is the charge merchant banks pay card-issuing banks for bank card transactions. The fee is usually passed
`on to retailers in the form of a discount fee.
`
`Since there will be no interchange fee, the product should be cheaper for merchants, Mr. Schultheis explained.
`
`Mr. Schultheis said he expects merchants to pay a flat transaction fee for the service rather than a discount fee, The discount
`fee, which usually amounts to few percentage points of the sale, has traditionally been assessed on credit card transactions. But
`many merchants refuse to pay a discount fee on debit card transactions.
`
`In a direct-debit, point-of-sale system, such as the one being developed by MasterCard, consumers pay for purchases at store
`checkout counters with their debit cards. The electronic network supporting the the system automatically debits customers'
`accounts and credits merchants' accounts for these transactions.
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` © 2014 Thomson Reuters. No claim to original U.S. Government Works.
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`MasterCard Plans Point-of-Sale Product For Merchants Leery..., 1984 WLNR 181898
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`With this new service, MasterCard is using the data processing capability it is developing to support other point-of-sale systems.
`For example, MasterCard expects to provide the data processing for Interlink, the point-of-sale system being developed by
`California's five biggest banks.
`
`MasterCard's new point-of-sale service is designed for regions that lack extensive coverage by one electronic network, Mr.
`Schultheis said. In these areas, the logo of MasterCard's new service will serve as the unifying linchpin for the point-of-sale
`network.
`
`Point-of-sale systems require the participation of most of the financial institutions in a market area to meet merchants'
`requirements that all customers have access to the point-of-sale system.
`
`MasterCard's new product would be unsuitable in places like California, Florida, and Iowa, where the financial institutions have
`banded together on their own to form one point-of-sale network. But MasterCard would like to provide the data processing
`support for point-of-sale systems in such regions, as it expects to do in California, Mr. Schultheis said.
`
`And MasterCard recently announced the availability of yet another point-of-sale product that will provide authorizations for
`credit card transactions and other services. It is to be provided through an agreement with Tymshare Inc.
`
`Organizations in three areas of the country have already expressed interest in MasterCard's newest product, Mr. Schultheis said.
`"I think we can realistically have one or two of these regions up by the end of the year."
`
`The product is known internally at MasterCard as MasterKey. But that name will not be used in the marketplace, and the
`product's name will not include the word "Master" or the traditional MasterCard logo, Mr. Schultheis said. "It won't be driven
`by MasterCard marks."
`
`MasterCard wants to avoid a situation in which merchants who accept the bank card and pay a discount fee see other retailers
`accepting a MasterCard payment device while paying only a transaction fee, Mr. Schultheis explained.
`
`But he agreed that merchants will probably be aware that MasterCard is offering the new product. 'Nontraditional Bank Card
`Merchants'
`
`MasterCard hopes to offer members a chance to deliver point-of-sale services to merchants who have typically declined to
`accept bank cards because of their unwillingness to pay discount fees, Mr. Schultheis said. "We believe the product's objective
`is to get at nontraditional bank card merchants."
`
`Banks and merchants will negotiate individually over what fees are to be paid and who will finance the installation of point-
`of-sale terminals.
`
`Mr. Schultheis expects the product to involve the use of customers' personal identification numbers at the point-of-sale.
`
`But a number of merchants have raised objections to that procedure, claiming it may hinder their checkout process.
`
`The new product should also offer member banks the opportunity to add an extra service to their existing proprietary debit
`cards, Mr. Schultheis said. "It's an extension of the utility of that ATM card."
`
`MIAMI
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`---- Index References ----
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` © 2014 Thomson Reuters. No claim to original U.S. Government Works.
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`MasterCard Plans Point-of-Sale Product For Merchants Leery..., 1984 WLNR 181898
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`Company: TYMSHARE INC; MASTERCARD INTERNATIONAL INC
`
`Industry: (I.T. (1IT96); Retail (1RE82); Banking & Financial Services Software (1BA49); Credit, Debit & Value Cards
`(1CR28); Software (1SO30); Retailers (1RE64); Retail Banking Services (1RE38); Application Software (1AP32); I.T. in
`Wholesale, Retail & Distribution (1IT06); Banking (1BA20); Debit Cards (1DE11); I.T. in Banking (1IT59); I.T. in Retail
`(1IT68); Point-of-Sale Systems (1PO74); I.T. Vertical Markets (1IT38); Financial Services (1FI37); Software Products
`(1SO56); I.T. in Financial Services (1IT24))
`
`Region: (Americas (1AM92); North America (1NO39); USA (1US73); Florida (1FL79); California (1CA98))
`
`Language: EN
`
`Other Indexing: (ATM; BANK CARDS; ELECTRONIC FUNDS TRANSFER ASSOCIATION; MASTERCARD
`INTERNATIONAL INC; MERCHANTS LEERY; NONTRADITIONAL BANK CARD MERCHANTS; TYMSHARE INC)
`(F. Alan Schultheis; MasterCard; MasterCard Plans Point; MasterKey; Schultheis)
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`Word Count: 1057
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`End of Document
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`© 2014 Thomson Reuters. No claim to original U.S. Government Works.
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` © 2014 Thomson Reuters. No claim to original U.S. Government Works.
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