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MIDWEST STUDY GROUP CONTINUES FORWARD WITH EFT JOINT VENTURE; ELECTRONIC TRANSACTIONS, INC. COULD LINK 4,000 BANKS WITH 11,000 ATMS IN 17 STATES

 CINCINNATI, June 29 /PRNewswire/ -- Representatives of the Midwest Study Group (MSG) met today in Detroit to continue to hammer out the details of the possible formation of a new EFT processing company.
 The Midwest Study Group is a consortium of financial institutions who have come together to evaluate the creation of what may be the largest broad-based electronic funds transfer (EFT) company in the U.S. The name selected for this new enterprise is Electronic Transactions, Inc. (ETI). The May announcement of the Midwest Study Group's formation followed on the heels of the birth of Electronic Payment Services, Inc. (EPS), another cooperative venture creating a strong competitive ATM and point-of-sale (POS) network in the Midwest.
 Serious Player in EFT/ATM Game
 "The high level of interest and quality of membership in our current study group provide considerable clout to our potential new EFT business in the Midwest region," noted Phillip A. Parker, executive vice president of Star Bank, N.A. and spokesperson for the group. With the recent addition of First Bank Systems (Minneapolis), "the membership of the study group expands to 15 major financial institutions with banking activities in 17 states. This most recent participation announcement further supports the group's activities in the highly fragmented Midwest and upper Midwest regions of the U.S." There are about 30 EFT networks currently operating in this 17 state area which supports an enormous population of over 27 million households (40 percent of all U.S. households). According to Parker, the group may continue to increase in size as the formation of ETI progresses. On a collective basis, study group institutions and their correspondents now operate over 8,100 ATMs, and have issued over 12 million debit cards. The potential company would be one of the largest processors of ATM transactions in the U.S. processing an estimated 1.8 billion transactions per year when fully operational.
 Defining the Playing Field
 The participants in ETI have substantial EFT programs which currently utilize significant internal and external resources for both production and research/development. Speer & Associates, Inc. (S&A), a financial services consulting firm based in Atlanta, has been retained by the group to assist in the evaluation and development of the network. Richard N. Speer Jr., chairman of S&A, observed that these internal and external processing platforms support increasingly important components of retail and, in some cases, wholesale banking activities. While those with internal platforms and capabilities have certain proprietary aspects, he noted, they are generally homogeneous in terms of the services supported and operate within industry standards. Meanwhile, those who purchase these EFT services from third parties are investing substantially in platforms and technical areas over which they have little influence or control.
 Many of the potential equity participants also serve smaller correspondent institutions providing EFT services including ATM terminal driving and transaction processing. What's more, all are members of various ATM shared networks on both a regional and national basis. "All of these common factors represent a major opportunity to form a joint venture for more efficiently providing these services to the owners and other institutions," said Speer.
 Meeting New Competition
 One compelling factor for forming this cooperative venture is the recent entrance of competing EFT processing companies such as EPS and the Southeast Switch (SES), which are owned by other financial institutions as well as from third party processing companies such as EDS. Until recently, these companies have operated in relatively confined geographic markets and have not represented a threat to correspondent services provided by the group member banks on an individual basis. "The business environment has changed and created a need for the group participants to respond," said Speer.
 Over the next 60 days, the group will continue to evaluate the business case associated with a wide range of possible EFT sharing arrangements while focusing on ATM and direct debit POS businesses. During this time, the group will be refining corporate goals and objectives, EFT services provided, ownership structure, management structure and membership requirements.
 -0- 6/29/93
 /CONTACT: Richard N. Speer Jr. of Speer & Associates, 404-396-2528, or Phillip A. Parker of Star Bank, N.A., 513-632-4161/


CO: Midwest Study Group; Electronic Transactions, Inc.; Speer &
 Associates, Inc. ST: Ohio IN: FIN SU: JVN


BR-BN -- AT008 -- 6731 06/29/93 13:16 EDT
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Date:Jun 29, 1993
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