Article

MasterCard courts credit unions with surcharge-free ATM network

MasterCard's agreement with MoneyPass means that it is expanding into the credit union and community bank markets.

November 1, 2010

MasterCard's agreement with MoneyPass, a surcharge-free ATM network, means that MasterCard is expanding its debit card services into the credit union and the community bank markets, said Patricia Hewitt, director of Debit Advisory Services for Mercator Advisory Group.

"MasterCard wants to reach credit unions and community banks, and MasterCard cannot do that unless its cards are accepted on a surcharge-free ATM network," Hewitt said.

MoneyPass, which operates a surcharge-free ATM network of more than 19,000 machines in the United States and Puerto Rico, announced last week that it signed a contract with MasterCard.

The agreement makes MoneyPass the preferred surcharge-free ATM solution for MasterCard debit issuers. The contract applies to card issuers, ATM acquirers, including banks and credit unions, ISO ATM acquirers and ISO card issuers.

According to the agreement, MasterCard may refer debit card issuers to MoneyPass for surcharge-free ATM access in the United States and Puerto Rico.

MoneyPass, which is owned byElan Financial Services, has over 1,250 credit union and bank members and nearly 40 million cardholders as participants. Elan is one of the nation's leading processors of ATM and debit card processing solutions for financial institutions, ISOs and retailers.

"The agreement with MoneyPass gives MasterCard customers and potential customers direct access to one of the nation's premier dedicated surcharge-free ATM solutions," said Leland Englebardt, group head of MasterCard's Global ATM Network. "MasterCard believes that the national distribution and locations of MoneyPass ATMs, as well as the visibility of the MoneyPass acceptance mark, will complement a wide variety of MasterCard-branded payment programs that rely on surcharge-free ATM access as a key element of their value proposition."

The deal gives MoneyPass a higher profile, said Doug Miraglia, president of MoneyPass.

"This new agreement with MasterCard makes MoneyPass visible to a wide audience of potential members who may be looking for yet another way to provide convenience and savings to cardholders and consumers, while offering a service that can attract more businesses."

This is the second agreement Purchase, N.Y.-based MasterCard has signed in recent weeks with a surcharge-free ATM network. In September, MasterCard inked a deal with Allpoint, the nation's largest surcharge-free ATM network. The contract with Allpoint gives MasterCard-branded prepaid cardholders surcharge-free access to Allpoint's more than 32,000 ATMs nationwide. Cardtronics Inc., the world's largest ATM ISO owns Allpoint, which is based in Bethesda, Md. Allpoint now operates more than 40,000 ATMs worldwide.

Mercator's Hewitt said MasterCard's contract with MoneyPass will help the card network grow its debit card business with credit unions. Although credit unions often join several surcharge-free ATM networks at any one time, Hewitt said they may want to reduce to their membership to one or two networks from five or six because of the Durbin Amendment.

"The Durbin Amendment does not necessarily apply to ATMs, but it may force credit unions to look at their cost structures," Hewitt said.