Back to the Future for B of A, STAR

B ank of America, which left the STAR network of PIN-based debit transactions for Visa's Interlink system six months ago, has signed a long-term participation contract with STAR.

B of A debit cards will be accepted at the more than 198,000 STAR system ATMs across the country. The agreement also calls for B of A to place its ATMs in 17 states into the STAR network. B of A debit cards and ATMs will carry the STAR logo beginning in late March 2002.

"Our top priorities for ATM network participation are a broad connectivity with extensive product functionality, access to high quality service and a voice in the network's direction," said Bond R. Isaacson, Payments Executive at Bank of America. "The STAR brand has significant value for the B of A ATM network and, most importantly, our millions of cardholders nationwide."

STAR is a wholly owned subsidiary of Concord EFS, a financial services industry processor. The purchase of STAR, which had been founded as a bank-owned network, was a major coup for Concord because STAR was the largest of the bank-owned ATM/POS networks. Concord is a new giant in the payments arena and seeks to compete head-to-head with Visa, especially over debit products.

It was speculated when B of A left the STAR system last year that the bank was sending a message to Concord about interchange fee pricing. Currently, B of A uses Concord's ATM processing services for approximately 1,100 ATMs in retail locations.

Last fall, plans were announced by Visa Interlink to increase the interchange fees charged to merchants. Retailers like Wal-Mart and Walgreen Drug Stores responded by announcing debit cards with only the Visa Interlink system logo no longer would be accepted at their stores.

B of A had 22 million debit cards linked exclusively to the Interlink network at that time. Four million of those cards did not include the Visa logo, and those customers were not able to use their debit cards at Wal-Mart, Walgreen and other retailers taking part in the boycott.