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Revised rates
The NYCE Corporation has adjusted its interchange rates for off-premise ATMs in an attempt to bring more independent deployers into the fold. Effective Feb. 1, NYCE's new interchange rate for withdrawals at off premise ATMs in the Northeast is 50 cents, an increase of 12 cents. That puts NYCE in line with its biggest competitors, Star and MAC -- with interchange rates of 45 cents to 55 cents and 34 cents to 55 cents, respectively. In the Midwest, NYCE is keeping the interchange rate of 36 cents to 55 cents it inherited when it purchased the Dearborn, Mich.-based Magic Line network in June of 1999. "It's somewhat less expensive to own and operate those terminals, so we don't see a compelling reason to change our interchange rates for withdrawals at on-premise devices," said Susan Zawodniak, vice president of the Woodcliff, N.J.-based NYCE Corporation and executive director of the NYCE Network. Zawodniak said the interchange increase was necessary because of the changing dynamics of the ATM market. According to Bank Network News, the number of off-premise ATMs surpassed those on-premise for the first time ever in 1999 -- largely because of the activities of ISOs and other non-bank deployers. Because of its pricing policies, NYCE has not been a favorite of ISOs. The result: an increasing number of off-premise ATMs without the NYCE logo and more NYCE cardholders' transactions being routed through national networks like Cirrus and Plus. NYCE research indicates that 40 percent to 50 percent of cardholders look for network logos before using an ATM, Zawodniak said. The approval rates of national networks tend to be somewhat lower than the regionals, she added, which can be frustrating for cardholders. "(The low interchange) was keeping the NYCE network from expanding, in terms of its brand, identity and display -- and also not doing our cardholders any favors," she said. NYCE also plans to court ISOs with mailings and other marketing efforts. "We want them to know about our new pricing structure and the benefits of an enhanced approval rate," Zawodniak said. "We're targeting groups with a large number of terminals in our primary market areas, and we're also interested in those with national coverage."
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