GROWTH PATTERNS AND REGIME CHANGE IN NATIONALLY SHARED ELECTRONIC BANKING NETWORKS: AN ECONOMETRIC ANALYSIS OF CIRRUS AND PLUS

Does adoption of shared electronic banking network technology in the financial services industry exhibit S-curve growth patterns as other technologies do? This paper examines this issue in the context of an econometric analysis of the national networks, CIRRUS and PLUS. When the size of the CIRRUS and PLUS networks grew into the range of market saturation, network operators decided in favor of "duality", a move to share their assets, while maintaining separate corporate identities. This research offers empirical evidence that it may be necessary to formulate more sophisticated models to describe the process of adoption and diffusion of an innovation in the presence of market competitionInformation Systems Working Papers Serie

ATM Surcharges and the Expansion of Consumer Choice

Since the imposition of surcharges for the use of automatic teller machines became widespread in 1996, the number of ATMs has increased significantly. That increase has benefited consumers greatly by making bank transactions more easily accessible. Critics of surcharges claim that banks are not passing cost savings generated by large ATM networks on to consumers. Such claims are false; operating ATMs is expensive and forces banks to use their own resources to meet consumer demand for ATMs. And surcharges are not anti-competitive; the banking industry remains competitive. Surcharges have created a new area of competition among banks as they try to meet consumer needs for fast and easy access to banks. Consumers who do not want to pay surcharges have plenty of options for accessing their bank accounts without paying a fee. A ban on ATM surcharges, as proposed by Sen. Alfonse D'Amato (R-N.Y.), would serve only to deny an important timesaving option to consumers who are willing to pay for the convenience of ATMs

Antitrust and payment technologies: commentary

Antitrust law ; Payment systems

A guide to the ATM and debit card industry - 2006 update

It has been three years since we published A Guide to the ATM and Debit Card Industry. Those three years represent a very dynamic time in the industry with a number of important developments. Some trends and patterns have persisted or accelerated, while others have peaked or reversed. Still others have emerged for the first time. The purpose of this 2006 Update is to document these trends and patterns by updating the data we presented in the original book and to discuss their implications for the current and future state of the industry. ; The most important development is that the two segments of the industry, ATM and debit, are in some sense going in opposite directions. The ATM industry has matured and is relatively stagnant, with major players jockeying for position, searching for and adopting different business strategies, and adjusting to the maturation of the industry. The debit card industry, in contrast, is expanding rapidly, with new players, new partnerships, new products, and new markets. The challenge in the debit card industry is not how to cope with a maturing industry but, rather, how to preserve and enhance position and not be left behind. ; In the first part of this Update, we highlight and discuss some of the most important changes in the ATM and debit card industry. For both the ATM and debit sides of the industry, we recap and analyze changes in activity levels, industry structure, and industry pricing. We then offer some thoughts on what might lie ahead, including a discussion of fraud and data security. In the second part of this Update, we present updated versions of the 23 charts and 11 tables from the original book, adding the three or four years of additional data that have since become available.Automated tellers ; Debit cards ; Point-of-sale-systems ; Payment systems

Shared ATM networks - the antitrust dimension

Automated tellers ; Payment systems

AUTOMATED TELLER MACHINE (ATM) NETWORK EVOLUTION IN AMERICAN RETAIL BANKING: WHAT DRIVES IT?

The organization of automated teller machine (ATM) and electronic banking services in the United States has undergone significant structural changes in the past two or three years that raise questions about the long term prospects for the retail banking industry, the nature of network competition, ATM service pricing, and what role ATMs will play in the development of an interstate banking system. In this paper we investigate ways that banks use ATM services and membership in ATM networks as strategic marketing tools. We also examine how the changes in the size, number, and ownership of ATM networks (from banks or groups of banks to independent operators) have impacted the structure of ATM deployment in the retail banking industry. Finally, we consider how movement toward market saturation is changing how the public values electronic banking services, and what this means for bankers.Information Systems Working Papers Serie

ATM SURCHARGES: EFFECTS ON DEPLOYMENT AND WELFARE

This paper analyzes the effects of ATM surcharges on deployment and welfare, in a model where banks compete for ATM and banking services. Foreign fees, surcharges and the interchange fee are endogenously determined. We find that, when the interchange fee is cooperatively fixed by banks to maximize joint profits, surcharges should be allowed, as they neutralize the collusive effect of the interchange fee. As a consequence, ATM deployment is higher and retail prices lower than without surcharges, increasing consumer surplus and social welfare.ATM, surcharge, foreign fee, interchange fee, collusion

GROWTH PATTERNS AND REGIME CHANGE IN NATIONALLY SHARED ELECTRONIC BANKING NETWORKS: AN ECONOMETRIC ANALYSIS OF CIRRUS AND PLUS

Does adoption of shared electronic banking network technology in the financial services industry exhibit S-curve growth patterns as other technologies do? This paper examines this issue in the context of an econometric analysis of the national networks, CIRRUS and PLUS. When the size of the CIRRUS and PLUS networks grew into the range of market saturation, network operators decided in favor of "duality", a move to share their assets, while maintaining separate corporate identities. This research offers empirical evidence that it may be necessary to formulate more sophisticated models to describe the process of adoption and diffusion of an innovation in the presence of market competitionInformation Systems Working Papers Serie

Global ATM banking: casting the net

ACH and ATM systems are examples of networks, where the benefits of one participant enhance the structure's value for the other participants. Some recent results from economic theory suggest that competitive networks are preferable in a social sense to monopoly networks.Clearinghouses (Banking) ; Automated tellers