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REGIONAL SHARED NETWORKS CONTINUE TO EXPERIENCE CONSOLIDATION AND MODERATE GROWTH, SPEER & ASSOCIATES FINDS

        STAR Leaps to Second Place with 63 Percent Increase
                  In Monthly Interchange Volume
    ATLANTA, June 16 /PRNewswire/ -- Interchange transaction volume at the nation's Top 20 shared automated teller machine networks reached a monthly total of 139.1 million at year-end 1992, up 10 percent from December 1991.
    This figure accounts for 89 percent of all interchange transactions in the U.S. and will grow at an annual rate of 10 percent to 15 percent, according to Speer & Associates, Inc. (S&A).
    S&A's eighth annual "Regional Shared Network Survey" found further evidence that the industry is maturing as growth rates in interchange transactions, ATMs and cardholders have begun to level off.
    As with past surveys, S&A identified the largest 20 shared networks. S&A's ranking of the Top 20 networks is based on the total number of reported interchange transactions rather than total switch transactions used in other industry surveys.  According to Richard P. Kisida, S&A senior vice president, "interchange volume, or the number of cardholder transactions at foreign terminals, is the most meaningful measurement of shared network performance because this volume is the one factor upon which the networks have the most influence."
    On the basis of monthly interchange volume, S&A said the Top 20 shared regional ATM networks in 1992 were:
               TOP 20 REGIONAL SHARED ATM NETWORKS
                          Average Transactions/Mo.    Interchange Uses/
    Rank      Network         ATM Interchange              Card Year
     1        MAC               25,657,056                    16.7
     2        STAR System       18,446,215                     8.9
     3        NYCE              16,049,511                     9.3
     4        Honor             10,744,752                     7.0
     5        Exchange/Accel     7,285,714                    15.9
     6        Cash Station       6,658,333                    22.8
     7        Most               6,625,000                     8.8
     8        Green Machine      5,802,793                    21.0
     9        Pulse              5,552,451                     7.5
    10        Jeanie             5,117,083                    21.2
    11        Money Station      4,323,540                     6.5
    12        Publix Presto      4,280,000                     N/A
    13        The Owl (Ohio)     4,072,074                    37.6
    14        ITS/Shazam         3,760,000                    22.6
    15        TYME               3,409,517                    13.6
    16        Yankee 24          3,375,000                     7.8
    17        Magic Line         2,544,848                     7.9
    18        THE CO-OP          2,166,667                    29.0
    19        Rocky Mtn. Bnkcd   1,653,598                    21.3
    20        MoneyMaker         1,588,273                    19.5
    Total/Average              139,112,425                    11.8
    Although some ranking within the Top 20 changed this year, the 1992 list remains the same as in the 1991 survey with the exception of the MoneyMaker network which replaced MPACT on the list.  Also, THE CO-OP Network, based in Pomona, Calif., replaced Instant Cash in S&A's Top 20 list.
    MAC remains the largest shared network in the country with STAR advancing to replace the NYCE network in the number two ranking.  For the eighth straight year, MAC captured the number one spot in 1992 with 25.7 million interchange transactions per month.  Although transaction growth slowed dramatically for MAC in 1991 and 1992, S&A's study projects that the Philadelphia-based network will grow at higher levels during the next few years.  The increase, in part, is due to the formation of EPS, a new broad-based EFT company under the MAC trademark, which includes MAC, The Owl and Trinet (PNC), Green Machine and Bank One's Jubilee network.
    These and other operating statistics for the January to December 1992 period are contained in the eighth annual nationwide survey of shared ATM networks conducted by S&A, the Atlanta-based financial services management consulting firm.  Study findings released here today are based on responses from 64 percent of the nation's shared regional networks.  The S&A study includes 1992 data on network membership, interchange and switch transactions, number of cardholders, ATMs and POS terminals, services offered, and operating expenses, as well as respondent commentary regarding views on network pricing, forecasts, and other pertinent issues and trends within the industry.
    Richard N. Speer, S&A's chairman, noted that 16 of the Top 20 networks meet the firm's definition of "superregional" -- a network that averages at least two million monthly ATM interchange transactions.  He expects to see more consolidation among the Top 20 over the next two to three years creating larger but fewer shared networks.  As a result of consolidation and economics, Mr. Speer predicts only 20 to 25 large shared regional networks will exist in the country within the next three to five years.
    The 1992 data, once again, supports movement toward consolidation with the Top 20 networks performing 139.1 million average monthly interchange transactions, with the larger networks emerging and processing even greater volume.  In 1992, for example, each of the top 16 networks averaged over 3.0 million monthly interchange transactions and each of the Top 10 networks averaged over 5.0 million monthly interchange transactions per month.  "The smaller networks are growing at a slower rate which makes them candidates for acquisition," Mr. Speer commented.
               TOP 20 SHARED REGIONAL ATM NETWORKS
                     1990-1992 COMPARISON
                                  Percent            Percent
    Key Statistics        1990    Change     1991    Change     1992
    Interchange
     Trans/Month (Mils)  115.7      9       126.4      10       139.1
    Number of ATMs      69,256      6      73,468       8      79,230
    Card Base (Mils)     123.6      5       129.6       9       141.5
    Uses per Card
     per Year             11.2      4        11.6       2        11.8
    Average Interchange
     Volume per ATM per
     Month               1,670      3       1,720       2       1,756
     For the fifth consecutive year, the Top 20 networks' monthly interchange volume exceeded the growth of both of its ATMs and debit card base; however, the differences between these indicators have narrowed over the past year.  S&A continues to expect that interchange volume will outpace ATM growth for the next few years due to the saturation of ATMs in most U.S. markets and that further consolidation of networks will continue to increase the volume of the Top 20 shared networks.  S&A also estimates that the growth of interchange transactions at the Top 20 networks will continue at an annual rate of 10 percent to 15 percent.
    The Top 20 reported 79,230 installed ATMs in 1992 which S&A estimates represents 92 percent of the total ATMs in the United States. The cardholder base for the group grew at a faster pace in 1992 than in the previous year with an increase of 9 percent to 141.5 million compared to 6 percent in 1991.
    S&A believes that growth in the number of ATMs and cards is primarily due to the acquisition of other networks, the addition of new members, ATM deployment, and the normal growth in debit cards.  As in the past, S&A feels that most of the growth in transaction volume, reported at 10 percent in 1992, is generated internally through increased membership, debit cards and usage.
    To provide a meaningful comparison of network performance, S&A divides the survey respondents into the five categories based on interchange volume, shown in the table below.
                   ATM INTERCHANGE TRANSACTIONS
                      1991-1992 COMPARISON
                      1992 Total Network         Number of Networks
                      ATM Interchange                          Pct.
    Category          Transactions Per Mo.       1991   1992   Chg.
    1                 2 million +                19     18     (5)
    2                 900,000 - 1,999,999         7      8     14
    3                 200,000 -   899,999        11     10     (9)
    4                 100,000 -   199,999         4      2     (50)
    5                       0 -    99,999         3      2     (33)
    Total                     156,540,000        44     40     (9)
                               Average Monthly
                               ATM Interchange
                               Per Network (000)
    Category               1991     1992    Pct. Chg.
    1                     6,635    7,550       14
    2                     1,374    1,741       27
    3                       434      620       43
    4                       135      165       22
    5                        67       91       36
    Total                 3,219    3,914       22
    Category 1, the network group considered "superregionals," processed over 7.5 million transaction per month on average in 1992 with one less network in the category than in 1991.  This volume represented a 14 percent increase over 1991.  Average monthly interchange transactions processed by Category 2 networks also increased in 1992 to 1.7 million, an increase of 27 percent from 1991 with one additional network in the category.
    "Shared network efficiency," according to Kisida, "is best measured by two ratios:  interchange volumes per ATM and interchange uses per card."  Category 1 networks posted only a 1 percent increase in average interchange transactions per ATM per month in 1992 indicating that growth in volume per ATM at the largest networks is occurring only modestly.
                  INTERCHANGE VOLUME PER ATM
                     1991-1992 COMPARISON
                                                 Total Interchange
                                                    Transactions
                   Number of ATMs                 Per Month (Mils)
                                     Pct.                         Pct.
    Category      1991       1992    Chg.        1991     1992    Chg.
        1        72,622     77,169     6         126.1    135.9     8
        2         7,696      8,071     5           9.6     13.9    45
        3         3,143      2,945    (6)          5.2      6.2    19
        4         1,013        345   (66)          0.5      0.3   (40)
        5           970        547   (44)          0.2      0.2     0
    Total        85,444     89,077     4         141.6    156.5    11
                   Avg. Interchange
                     Transactions
                  Per ATM Per Month
                                      Pct.
    Category       1991     1992      Chg.
        1         1,736     1,761      1
        2         1,250     1,722     38
        3         1,655     2,105     27
        4           531       870     64
        5           207       366     77
    Total         1,657     1,757      6
    Kisida also noted, "the second efficiency ratio, interchange transactions per proprietary debit card, increased by 4 percent from 1991."  He explained that this increase was primarily the result of a 41 percent increase in interchange transactions per debit card for the Category 2 networks.  Growth in the number of interchange transactions per debit card for the Category 1 networks was flat in 1992 indicating that card growth is keeping up with interchange volume growth vs. increased card usage.  According to Mr. Speer, the difference in interchange transaction growth between Category 1 through 3, and 4 through 5, is primarily due to the higher level of convenience offered by the larger networks, greater visibility through effective signage, and expanded advertising campaigns.
    Network Services
    This year, S&A reports that all networks except the Cactus Switch provided ATM interchange services in 1992.  For the third straight year, networks offering interregional interchange increased over the previous year from 79 percent in 1991 to 86 percent in 1992.  Small increases were also seen in the number of networks offering ATM terminal driving support and interregional interchange.  In contrast, deposit interchange services decreased 8 percent in 1992 over 1991 levels to 72 percent.
    Altogether, S&A received mixed responses regarding the POS support category.  Over half of the networks reported providing POS direct debit support in 1992.  POS credit card authorization and capture support increased 8 percent from 1991 levels to 40 percent, while POS terminal support reported no change from the previous year with 34 percent.
    ACH and home banking services remained virtually unchanged from the previous year.  Two new service categories added this year are EBT support services offered by 14 percent of the networks and card production services offered by 45 percent.  Other services mentioned include VISA Debit, Electronic Check Guarantee, and Frequent Shopper Programs.  The most frequently cited new services were Electronic Data Interchange (EDI) and automated PIN issuance.
    POS Transaction Volume
    As in past surveys, S&A noted the number of POS terminals and transaction volumes have increased; however, Mr. Speer believes the continued lack of support for POS and the immaturity of the business, as well as changes in the respondent base, all contribute to wide variances in survey results from year to year.
                 1991-1992 POS INTERCHANGE TRANSACTIONS
                     Total Terminals             Active Terminals
                      Direct Debit                    During
                         Capable                  Previous Month
                                     Pct.                         Pct.
    Category      1991       1992    Chg.        1991     1992    Chg.
        1        75,133    102,879    37       45,640    70,879    55
        2        34,511     32,232    (7)      32,489    30,654    (6)
        3         2,407      2,924    21        2,930     2,916     0
        4           631        502   (20)         428       465     9
        5         4,300      5,500    28        4,300     5,100    19
    Total       116,982    144,037    23       85,787   110,014    28
                      Direct Debit                 Transactions Per
                      Transactions                  Active Terminal
                     Per Month (000)                   Per Month
                                     Pct.                         Pct.
    Category      1991       1992    Chg.        1991     1992    Chg.
        1         4,552      6,203    36          100        88   (12)
        2           155        223    44            5         7    45
        3            41        125   205           14        43   206
        4           111        104    (6)         259       224   (14)
        5           192        184    (4)          45        36   (20)
    Total         5,051      6,839    35           85        62   (27)
    Overall, the number of direct debit capable terminals increased at a higher rate than in 1991 from 14 percent to 23 percent in 1992. According to Mr. Speer, the pace at which POS direct debit terminals are being deployed increased due at least partially to improving economic conditions nationwide.  Mr. Speer believes that an even better indicator of POS activity is the number of active terminals.  This number increased at a faster pace than in 1991 with a 28 percent increase from 85,787 in 1991 to 110,014 in 1992.  Transaction volume also increased significantly with a reported volume of over 6.8 million direct debit transactions per month vs. 5.1 million for 1991, a 35 percent increase. Due to high growth in terminal deployment to support new programs in 1992, transactions per terminal fell by 27 percent, which in S&A's view,
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Date:Jun 16, 1993
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