ABN AMRO Gets Hitched to Star

ABN AMRO North America and Concord EFS have entered an agreement under which ABN AMRO will participate in Concord's Star debit network, the largest PIN-secured debit network in the United States with connectivity to 6,232 financial institutions and 124 million deposit accounts.

The conversion is expected to be completed at the end of June.

"Star allows us to offer our customers access to a million ATM and payment locations coast-to-coast," said Steven Nowaczyk, senior vice president, ATM Services at Chicago-based ABN AMRO North America.

"But what makes Star especially appealing is the expanded product functionality, such as ATM deposits and cash-back at the point of sale, that is available with such broad connectivity," Nowaczyk added.

Discussions to join the Star network began in earnest ten months ago, after ABN AMRO had acquired other financial institutions in Michigan and Indiana. ABN AMRO is the holding company for LaSalle Bank with retail offices throughout the Chicago metropolitan area, and Standard Federal Bank in Michigan and Indiana.

Radio and billboard advertising are being used to raise awareness among the $90 billion bank's Michigan and Indiana customers, as well as those in Illinois.

ABN AMRO's primary reason for joining the Star network was to provide consistent, interchangeable services for all of its card holders across all of its banks. Its network of approximately 1,400 ATMs, which includes over 450 ATMs in Illinois, was previously part of Concord's Cash Station network.

"One of the problems with Cash Station was the brand was good, but its reach wasn't very far," Nowaczyk said. "The Cash Station network was only in Chicago, not even throughout Illinois."

The Star deal required no hardware changes on ABN AMRO's part, only interface software changes in order to create new routing.

As the network develops, Nowaczyk expects to see more products that can better serve ABN AMRO's customers, such as point of sale over the Internet. Star intends to tie these to its ATM network.

"We are impressed with Concord's commitment to delivering broad functionality and new secure, convenient debit services in the future," said Nowaczyk.

One of these new services is a person-to-person (P2P) payment service, which will allow an individual to send money from one ATM to another ATM, where another person could collect the cash, according to Ronald Congemi, senior vice president and president of network services at Memphis, Tenn.-based Concord EFS.

A pilot program of the P2P payment service is slated to begin in September, with full rollout planned for early next year.

The transaction will be secured by an eight-digit secret code. The person sending the money will choose four digits, and the system will assign the other four digits. The code will then be provided to the recipient.

Star provides four primary types of service to financial institutions: full-service processing (in which terminal driving, card authorization and electronic funds transfer switching are all performed by Star); authorization processing (in which terminal driving and EFT switching are performed by Star, and card authorization is performed by the financial institution); co-op processing (in which Star drives ATMs, provides EFT switching and authorizes the cards except for the final balance authorization, which is performed by the institution); and intercept processing (in which the institution drives its own ATMs and authorizes its own cards, and Star provides EFT switching).