NEW YORK -- Four of the nation's strongest regional banking companies Wednesday announced they had agreed to form a joint venture that will create the nation's largest electronic payment service.
Banc One Corp., CoreStates Financial Corp., PNC Financial Corp. and Society Corp. are partners in the venture.
By the fourth quarter of 1992, the new company, Electronic Payment Services, Inc. will handle automatic teller machine transactions and process electronic point-of-sale processing through debit cards that take payments directly from consumers' bank accounts.
The venture will establish the nation's largest ATM transaction processor, handling about 1 billion ATM transactions a year for 1,400 financial institutions and 13,000 ATMs in 16 states, mainly in the mid- Atlantic region and Midwest.
As a debit card transaction processor, the company expects to handle 650 million transactions a year through more than 150,000 point-of-sale terminals, which account for about 20 percent of the national volume.
Mark Greenberg, a spokesman for the new company, said current holders of debit or ATM cards from participating banks would be able to use their cards at more locations. But as the cards expire, the holders probably will be issued a new card with a common identity and a name that has not yet been decided yet, he said.
The venture, which will be incorporated in Delaware and headquartered near Wilmington, anticipates annual revenues of more than $200 million and expects to hire about 600 employees.
'Today's action by four strong financial institutions represents the partners' common vision of maintaining and strengthening the historic leadership role of banks in our nation's consumer payment system as it moves from a cash- and paper-based system to an electronic one,' said Douglas D. Anderson, executive vice president and head of electronic payment services at CoreStates. Anderson will become chief executive officer of Electronic Payment Services.
Each bank will receive equity in the new company in return for contributing their ATM and point-of-sale networks.
Banc One, CoreState and PNC each will have a 31 percent stake in the new company, while Society will own a 7 percent share.
Banc One, based in Columbus, Ohio, will contribute its Jubilee ATM network and its point-of-sale business.
CoreStates, headquartered in Philadelphia, will offer its Money Access Service Inc., a leading regional ATM network, and its Buypass Corp., the nation's leading third-party processor of electronic POS transactions.
In return, CoreStates also will receive about $78 million in cash and $245 million of Electronic Payment Services preferred stock with dividends tied to the earnings performance of the new company.
PNC, headquartered in Pittsburgh, will contribute its Trinet ATM network, its Owl ATM network and its point-of-sale business.
Cleveland-based Society will contribute its Green Machine Network Corp., a leading ATM network in the Midwest, and its point-of-sale business.
Current operating earnings for the four banks were not expected to be affected by the proposal.
The new company's board of directors will include senior executives from each bank.
The transaction is subject to Federal Reserve Board approval and closing conditions.
